Shareholders revolt over pay plans for Tesco boss

Supermarket giant Tesco suffered a shareholder blow today after nearly 40% of investor votes were cast against pay plans amid concerns over rewards for its US boss.

The UK’s biggest supermarket narrowly avoided shareholder defeat at its annual meeting in London, with its directors’ remuneration report voted against by 38% of votes – close to the critical 50% threshold.

Tesco faced a barrage of criticism from shareholders over the pay packet of its US manager, with claims from one lobby group ahead of today’s meeting of “excessive” compensation awarded to Tim Mason – the head of Tesco’s loss-making US chain Fresh & Easy.

Mr Mason received £4.3m (€5.2m) in the company’s 2009/10 financial year, up from £3.8m (€4.6m) a year earlier, despite a £165m (€200m) loss at the fledgling US venture.

Tesco chairman David Reid said the chain would listen and engage with concerned investors, but defended Mr Mason’s paw rewards.

He said: “This is a critical stage for the US business model – it’s absolutely appropriate that the team receives not only the basic incentives, but the incentives for driving that business model.”