The board of Tesco will be under scrutiny at its annual meeting as shareholders question CEO Ken Murphy’s nearly £10 million ($13 million) pay package.
The discussion comes amid growing investor discontent over executive compensation during a cost of living crisis.
Tesco’s annual report, published last month, revealed Murphy earned £9.93 million in the year ending February 24.
This was more than double the £4.44 million the previous year.
According to responsible investment group ShareAction, Murphy’s pay is 430 times the average Tesco employee’s salary.
ShareAction plans to challenge the Tesco board on justifying Murphy’s pay while contract cleaners and security staff earn less than the real Living Wage.
The real Living Wage, calculated by the Living Wage Foundation, represents the minimum hourly rate necessary for workers to afford basic needs such as housing and food.
Currently, it stands at £13.15 per hour in London and £12 per hour in the rest of the United Kingdom, both higher than the UK’s National Living Wage of £11.44 per hour.
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ShareAction’s Good Work investor coalition, representing $6.6 trillion in assets under management, includes members such as LGIM, HSBC Asset Management, Aviva, NEST, and Scottish Widows.
The coalition is urging all major UK supermarkets to become accredited Living Wage employers, ensuring all staff, including third-party contractors, are paid the real Living Wage.
Dan Howard, head of Good Work at ShareAction, said: “Unfortunately, Tesco is dragging its feet on taking the right steps to pay its third-party contracted staff the Living Wage.”
Tesco said last month that a significant portion reflects his success in meeting challenging targets in a highly competitive sector and his efforts to create value for customers, colleagues, suppliers, communities, and shareholders.
The company added that it remains committed to offering a competitive and fair reward package for all colleagues.
