Tesco's top 500 face pay and bonus shake-up
Seven out of the eight executive directors at Tesco were paid more than £2 million last year, but almost all of them took considerable pay cuts from the previous year.
Sir Terry Leahy, who stepped down as chief executive in March, saw his pay and bonus package fall from £5.2 million to £4.3 million despite producing a 12% rise in profits in his final year in charge.
His successor Phil Clarke's package dropped from £2.7 million to £2.3 million. But when he took up his new role his basic salary was hiked from £825,000 to £1.1 million.
The supermarket giant's second- highest director, head of US operations Tim Mason, collected £3.1 million, down from £4.3 million.
In its annual report today, Tesco announced a major shake-up in how directors will be rewarded in future. This includes removing special pay deals for the chief executive and the US boss. Bonuses will also be awarded on simpler performance targets.
Chairman David Reid said: "We have designed a new structure which is simpler and more collegiate, with clear strategic financial targets, delivering broadly the same levels of remuneration as before but in a better way and more aligned with the interests of our shareholders. We will apply the same performance measures through the business to the top 500 Tesco managers, ensuring that shareholders' interests are embedded throughout the leadership of our business."
