Crowd pleaser Tesco chief's pay to be pinned on happy customersComments Off on Crowd pleaser Tesco chief's pay to be pinned on happy customers
The experience of shoppers, staff and suppliers will now play a part in setting what remuneration Tesco’s chief executive gets, the grocer’s annual report revealed today.
Dave Lewis landed £4.6 million in pay and bonuses last year but has been granted options over a potential 2.16 million shares — worth £3.4 million at today’s share price — under its long-term share scheme.
The shares will vest in 2019 depending on his success in turning round the supermarket, which faces battles including a Serious Fraud Office investigation over an accounting scandal and rampant discounters.
But Tesco said today that 20% of the award will be based on factors including the share of customers recommending it as a place to shop as well as supplier and staff satisfaction.
The more traditional total shareholder return benchmark accounts for 50% of the bonus plan and cash generation 30%.
Last month Tesco reported annual profit of £162 million, up from a £6.3 billion loss — the biggest-ever on Britain’s High Street — in 2015.
Despite the signs of progress, Stefan Stern of the High Pay Centre said Tesco should tread carefully when it comes to executive pay.
“I think business leaders need to think very carefully about the impression they create through the rewards they take out of business, particularly if they are in a highly competitive, price-sensitive market.”