Morrisons has gifted finance director Richard Pennycook £1.25m in shares to encourage him to stay at the grocer.

The sweetener, revealed in Morrisons’ annual report, was awarded in March this year. It will vest two years from that date so long as Pennycook remains at the supermarket, and its underlying earnings per share growth meets or exceeds the growth in the Retail Price Index until the end of the 2012/2013 financial year.  

The grocer told The Telegraph that when former chief executive Marc Bolland left to join Marks and Spencer it “considered it essential to secure Richard Pennycook’s services as group finance director”.

Morrisons reported pre-tax profit for the year ending January 30 of £874m, up from £858m the previous year. Sales were up 7% to £16.5bn and like-for-like sales edged up 0.9%.