Outgoing Tesco boss Dave Lewis sees £6.4m pay packet voted down
Dave Lewis’ tenure as Tesco’s chief executive looks set to end on a sour note after shareholders voted down the pay report that will give him £6.4m in compensation.
Over 67 per cent of shareholders revolted against the report at the grocer’s annual meeting today, but as the vote is non-binding Lewis will still receive the full amount.
Investor groups had called on shareholders to vote against the proposals, pointing to the fact that Tesco had excluded Ocado as a competitor in its benchmarking report, thus boosting Lewis’ bonus.
The supermarket said that Ocado was not included in the competitor group because it had turned itself into a technology company licensing its software instead of a straight grocery business.
One of the investor groups, Glass Lewis, said in its note that with Ocado included, Tesco had underperformed its rivals by 4.2 per cent over three years.
However, when it took out Ocado, it beat its competitors by 3.3 per cent.
For the outgoing Lewis, the vote is a disappointing note on which to depart Tesco after winning many plaudits for his role in turning the company around over the last five years.
Lewis will step down at the end of September and will be replaced by Boots veteran Ken Murphy.
The vote came as Lewis announced his last results as Tesco boss, with sales rising nearly nine per cent in the first quarter due to the coronavirus pandemic.
Underlying sales in the UK rose 8.7 per cent in the 13 weeks to the end of May, reaching £9.9bn.
It maintained its outlook on profit, saying that it expects income for the full year to be more or less the same as in 2019/20 as capital expenditure rises in tandem with sales.
While in the UK shopping frequency dropped 32 per cent as Brits stayed at home, the average transaction size rose by 64 per cent.
Online sales in the UK rose an average of 48 per cent over the quarter, including a 91 per cent jump in May alone.
Tesco said it had increased its home delivery slots from 600,000 to 1.3m per week, taking its costs for digital to £4m.