The pay of the chief executive of Britain’s largest supermarket, Tesco, more than doubled to nearly £10m last year, it has been revealed.
Ken Murphy took home £9.93m during the group’s financial year to February 2024, up from £4.44m in the prior period.
The CEO’s fixed pay totalled £1.64m, down from £1.71m, while his annual bonus payout rose from £2.73m to £3.38m.
The huge jump in his pay was because of a Performance Share Plan (PSP) payout of £4.91m which was not handed out last year.
According to Tesco’s annual report, chief financial officer Imran Nawaz took home £4.95m in the year, up from £2.27m.
Tesco has also confirmed that Murphy will get a base salary increase of three per cent from May 26, 2024, while Nawaz will get a 5.4 per cent rise.
The supermarket pointed out that they were below the 9.1 per cent increase provided to UK hourly-paid employees, “who represent the vast majority of the UK workforce”.
Tesco: “More important than ever for us to live our purpose”
The remuneration committee said: “While our financial performance has been strong, prioritising the interests of all our stakeholders remains at the heart of our purpose.
“In a challenging economic environment, it has been more important than ever for us to live our purpose and to demonstrate our values for the benefit of all of our stakeholders; customers, colleagues, suppliers, communities and shareholders.”
It added: “The reward for our executive directors is driven by the strong performance of the business.
The pay of Tesco’s CEO and CFO swelled during its latest financial year. (Credit – Tesco’s annual report)
“Our remuneration policy reflects the complexities of managing a business of the size and scale of Tesco, and is comparable to policies offered by other FTSE 50 companies.
“A large proportion of the total package has been achieved thanks to both Ken Murphy and Imran Nawaz achieving stretching targets in a highly competitive sector and working to create value for customers, colleagues, suppliers, communities and shareholders.
“Tesco remains committed to a competitive and fair reward package for all colleagues and this year we have invested a record £300m in a pay rise for our UK hourly-paid colleagues, as well as significantly enhancing the range of wellbeing benefits we offer.”
Profits rocket at Britain’s largest supermarket
The annual report comes after Tesco announced its sales rose 7.4 per cent year-on-year to £61.5bn in the 12 months to February 24, 2024, while its pre-tax profits rocketed almost 160 per cent to more than £2.2bn.
At the time, Murphy said: “This strong performance reflects the hard work of colleagues across the whole Tesco group, and their commitment to serving our customers.
“Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we’ve made to the value and quality of our products.
“Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.”
Despite the large increase in the take home pay of both its CEO and CFO, Tesco has avoided any fallout with its shareholders over its remuneration policy with more than 90 per cent backing it.
However, other London-listed companies have been hit by a series of shareholder revolts over executive pay including Astrazeneca, Smith & Nephew and Plus500.
Some firms in the capital have argued that they face an uphill battle recruiting executives due to the hefty salaries made in the US, which often dwarf those paid to UK executives.
The pay of top bosses has been climbing in recent years despite pushback from some proxy groups.
FTSE 100 chiefs made an average of £4.4m in 2022, up 16 per cent on the previous year, according to the thinktank, the High Pay Centre.