Tesco awards chief executive €3.8m annual bonus

Tesco has awarded chief executive Dave Lewis an annual bonus of nearly £3m (€3.8m), according to sources.

The payout, to be revealed in the company’s annual report today will mean Mr Lewis pockets slightly less than his maximum entitlement of £3.13m.

Tesco’s 265,000 UK employees are also set to share a so-called “turnaround bonus” of £185m, equivalent to about 5% of each staffer’s salary, said the person, who asked not to be identified as the information is yet to be disclosed.

Mr Lewis’ pay package comes after a year in which growth remained elusive for Tesco, although UK same-store sales rose in the fourth quarter for the first time in several years.

A growing number of compensation packages for British chiefs executive are attracting the ire of investors.

In April, almost 60% of investors shot down payouts at BP, while Reckitt Benckiser shareholders also lodged a protest vote. A Tesco representative declined to comment.

Last year, Tesco increased the proportion of executive bonuses that are directly linked to sales growth to 50% from 18%.

The new policy aimed to move management away from practices that led to the company overstating its profit by £326m in 2014. Mr Lewis’s basic salary in 2015 was £1.25m.