Tesco board faces heat over CEO's 10 mln pound pay package
By James Davey
LONDON, June 14 (Reuters) -The board of Tesco TSCO.L, Britain's biggest supermarket group, will be asked to justify chief executive Ken Murphy's near 10 million pounds ($13 million) pay package when it faces shareholders at its annual meeting on Friday.
Investors have become more vocal in their opposition to boardroom pay deals they deem excessive amid a cost of living crisis.
Tesco's annual report, published last month, showed Murphy was paid 9.93 million pounds in the year to Feb. 24, 2024, up from 4.44 million pounds in 2022/23.
His pay was 430 times what the average Tesco employee earns, according to responsible investment group ShareAction.
It plans to ask the Tesco board how they can justify Murphy's pay while contract cleaners and security staff are paid less than the so-called real Living Wage.
Established by charity the Living Wage Foundation, the real Living Wage is a calculation of the minimum hourly rate necessary for workers to afford housing, food, and other basic needs.
Currently, it is 13.15 pounds per hour in London and 12 pounds in the rest of the United Kingdom - higher than Britain's main government-mandated minimum wage, the National Living Wage, of 11.44 pounds per hour.
ShareAction's Good Work investor coalition represents $6.6 trillion in assets under management. Members include LGIM, HSBC Asset Management, Aviva, NEST and Scottish Widows.
It is urging all of Britain's major supermarkets to accredit as a Living Wage employer, guaranteeing all staff, including third-party contractors, the real Living Wage on an ongoing basis.
"Unfortunately, Tesco are dragging their feet on taking the right steps to pay its third-party contracted staff the living wage," Dan Howard, head of Good Work at ShareAction, said.
Tesco said last month that a large proportion of Murphy's total package reflected him "achieving stretching targets in a highly competitive sector and working to create value for customers, colleagues, suppliers, communities and shareholders."
It added that it "remains committed to a competitive and fair reward package for all colleagues."
In April, Tesco reported an 11% rise in 2023/24 profit. Its shares are up 15% year-on-year.
The shareholder meeting will be held after Tesco updates on first-quarter trading.
($1 = 0.7850 pounds)
Reporting by James Davey; editing by David Evans
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