Tesco faces the prospect of an investor revolt at its AGM next month over “excessive” executive pay, singling out US boss Tim Mason as an example.
US investor CtW Investments has circulated an open letter to the grocer’s shareholders on the matter, the Guardian reported.
Shareholder advisors RiskMetrics and Manifest have also signalled concern over Tesco’s executive remuneration.
CtW wrote: “Tesco shareholders should take decisive action to address the remuneration committee’s failure to link executive pay with performance. These failures are evidenced by the excessive compensation awarded to Tim Mason despite the US operation’s dismal performance.”
Mason, who runs Tesco’s Fresh & Easy chain on the US West Coast, is the grocer’s paid director after chief executive Sir Terry Leahy and was paid £4.3m last year.
CtW works with pension funds linked to US unions including the United Food & Commercial Workers International Union, which has been campaigning for recognition from Tesco.
CtW’s letter claims that Tesco’s remuneration committee has “shifted the goalposts in order to provide Mr Mason with a pay package that no reasonable analysis of Fresh & Easy’s performance could justify”.