Tesco faces backlash after its CEO, Ken Murphy, earned nearly £10 million last year, a sum seen as a “slap in the face” to struggling workers amid a cost of living crisis.
Murphy’s compensation package has more than doubled from the previous year.
It is believed to be the highest ever for a Tesco boss.
It surpasses the £7 million paydays of former CEO Sir Terry Leahy.
Murphy’s pay includes a long-term bonus worth three times his basic salary.
This is paid in shares that must be held for at least two years.
It also includes a £3.4 million annual bonus tied to sales, profits, and individual objectives.
According to Tesco’s annual shareholder report, Murphy’s total pay now exceeds 430 times the average Tesco worker’s pay.
This is more than double the figure of 197 the previous year.
This places him among the top earners in FTSE 100-listed companies.
He is still behind AstraZeneca CEO Pascal Soriot, who could earn £18.7 million this year.
Tesco, which owns Booker grocery wholesaler and operates stores in Eastern Europe, the Republic of Ireland, and the UK, recently reported a 159 percent surge in pre-tax profits to £2.3 billion.
This is the highest in over a decade for the year ending February 24.
Sales also rose 7.4 percent to nearly £61.5 billion, driven by strong online and large-store growth.
Boss earns 430 times the average Tesco worker salary
Sharon Graham, the general secretary of the Unite union, said: “Ken Murphy’s £5m wage increase is a slap in the face to the millions of struggling workers and their families who paid for it through higher food bills.
“The fact is, Tesco has taken advantage of the cost of living crisis to rake in obscene profits, and it is far from the only one.”
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Luke Hildyard, executive director of the High Pay Centre think tank said Murphy’s pay gap with a typical employee was the third highest since pay ratio reporting began five years ago.
Murphy missed five percent of his potential annual bonus, or £176,000, due to Tesco’s failure to meet food waste reduction targets.
His fixed pay also slipped to £1.6 million from £1.7 million after the company stopped subsidizing his commuting costs.
Alison Platt, chair of Tesco’s remuneration committee, defended Murphy’s pay as being benchmarked against other FTSE 50 companies and comparable international businesses.
Platt said: “This pay award reflects the fact Tesco has delivered for all of its stakeholders over the last year – from its most competitive-ever customer offer to its record investment in colleague pay.”
“A large proportion of the total package has been achieved because the business met stretching targets in a highly competitive sector and worked to create value for customers, colleagues, suppliers, communities and shareholders.”
