Investor lobby groups slam Tesco over executive pay
Tesco, the world's No.3 retailer, could face a revolt over executive pay after investor lobby groups urged shareholders to vote against the company's remuneration report at its July 2 annual meeting.business Updated: Jun 18, 2010 13:38 IST
Tesco, the world's No.3 retailer, could face a revolt over executive pay after investor lobby groups urged shareholders to vote against the company's remuneration report at its July 2 annual meeting.
CtW Investment Group, a U.S. firm which works with pension funds that have stakes in Tesco, said it was particularly upset by the pay awarded to Tim Mason, head of the British group's loss-making U.S. chain Fresh & Easy.
"Tesco's shareholders are troubled by the Tesco board's apparent willingness to modify performance targets to award pay for failure," said CtW executive director William Patterson.
Mason received a total remuneration package of 4.3 million pounds ($6.4 million) in Tesco's 2009-10 financial year, up from 3.8 million the year before, according to the group's annual report.
RiskMetrics, whose Research Recommendations and Electronic Voting (RREV) service provides voting advice to UK pension funds, has also raised concerns over executive pay at Tesco.
"We are disappointed by these reports, especially given the strong performance of Tesco in the last year against the backdrop of very difficult economic conditions," a Tesco spokesperson said.
"In contrast to RiskMetrics, the influential ABI (Association of British Insurers) has recently published a supportive 'Blue Top' report on Tesco for shareholders." Tesco in April posted an 8.7 percent increase in annual profit and lifted its dividend by nearly 10 percent.
Earlier in the week it said the global economic recovery was building and growth in its main UK market would pick up after quarterly sales were hit by lower food price inflation and higher fuel costs.