Tesco’s board suffered a grilling over executive pay at its AGM, but a shareholder revolt over the issue failed to materialise.
The grocer had been criticised ahead of the meeting by Pensions and Investment Research Consultants over a 179% increase in benefits for boss Dave Lewis and a £142,000 relocation package.
Pirc hit out at the cash Lewis was handed to cover the stamp duty and legal fees he incurred when relocating from London to the Hertfordshire area, close to Tesco’s Welwyn Garden City head office.
It added that the long-term incentive plan awarded to Lewis during the year was also excessive, at more than 200% of his salary.
But investors voted unanimously in favour of Tesco’s remuneration report this afternoon, with only 9.4% voting against directors’ pay packages.
That didn’t stop shareholders using the meeting to condemn the salaries paid to certain members of Tesco’s board.
One shareholder, John Farmer, slammed the “grossly and absurdly excessive” packages awarded to Lewis, chairman John Allan and finance boss Alan Stewart, as well as the non-executives on Tesco’s board.
The grocer was also probed by shareholders on the rationale behind its proposed £3.7bn acquisition of wholesale giant Booker, with some suggesting the deal would not be conducive to its current strategy nor create shareholder value.
Two of Tesco’s largest shareholders, Schroders and Artisan Partners, which own a combined 9% stake between them, described the deal as “foolhardy” and said it would make creating value for shareholders “extremely challenging.”
But Lewis insisted the deal would allow the grocer to tap into the £86bn food service market and leverage increased buying power to purchase a greater volume of produce at a cheaper price.
Chairman Allan said 11 of the board’s 12 members were in agreement over the merger, with non-executive director Richard Cousins, who resigned over the deal, “in a minority of one.”
Allan said: “The rest of us believe that Booker will help us reach the goals we want to achieve.”
The proposed merger is currently being investigated by the Competition and Markets Authority.
Tesco requires a majority of shareholders to vote in favour of the deal in order for it to go ahead, but that vote is poised to take place later in the year.