Tesco faces investors amid pressure over pay

Tesco faces investors at its annual general meeting later today amid mounting pressure on the UK’s biggest supermarket.

The retail giant holds its AGM – the last for chief executive Terry Leahy before he steps down next March – as it comes under fire over pay issues and alcohol pricing.

There is growing unrest over the pay packet of its US boss, brought to the fore when a lobby group urged shareholders to vote in protest at today’s meeting.

CtW Investment, which works on behalf of pensions funds linked to US unions, balked at what it claimed was “excessive” compensation awarded to Tim Mason - the boss 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 US venture.

But Tesco hit back, citing its strong performance in the last year against difficult economic conditions.

It also pointed out that the Association of British Insurers recently published a supportive report on Tesco for shareholders and said its approach to executive pay was based on rewarding good long-term performance.

The chain may also be forced to defend itself against complaints over its pricing policy on alcohol after MPs condemned the group for reportedly selling lager at below cost price.

Liberal Democrat Bob Russell yesterday tabled a Commons motion, backed by 10 other MPs, calling on the store’s shareholders to speak out at its AGM.

The UK's coalition Government said supermarkets and off-licences will be banned from selling alcohol below cost price – with Sir Terry only last month saying he was in favour of a minimum price.

But an investigation by the Mail on Sunday claimed the supermarket sold Stella Artois lager at 6p below the cost of tax and excise duty alone.

In the motion, Mr Russell said he “deplores the behaviour of Tesco in selling lager below cost price only a month after calling on the Government to outlaw the practice”.

Tesco’s investor gathering comes ahead of a difficult year for retailers, with new Government measures and an impending VAT hike to 20% adding to already difficult trading conditions.

Plunging food price inflation is hitting food sales growth – leaving Tesco’s like-for-like figures up just 0.1% in the three months to May 30.

However, the group said it still expects sales to rise by around 3% over its full financial year.

More in this Section

Toyota and Honda in major recall over faulty air bagsToyota and Honda in major recall over faulty air bags

Dunnes Stores was premature in challenging Point Village square disputeDunnes Stores was premature in challenging Point Village square dispute

Donald Trump to warn UK against ‘discriminatory’ tax on tech giantsDonald Trump to warn UK against ‘discriminatory’ tax on tech giants

Study: Dublin Airport contributes €10bn to Irish economyStudy: Dublin Airport contributes €10bn to Irish economy


Jim Murray is a guitarist, originally from An Muine Fliuch, Co Cork.A Question of Taste: Jim Murray, Guitarist

A consultant said it’s not ‘trigger finger’ and is looking into other possible conditions.Natural health: 'My middle finger is stuck at a slight angle'

If you're a gardener who follows astrology, you may be interested to know your garden could perform better if you plan your gardening schedule according to the path of the moon.Tuning into the cycles of nature is all part of lunar gardening

More From The Irish Examiner