Tesco’s management incentive scheme is the most likely among those of the big grocers to encourage strong performance, broker Bernstein has concluded.

The broker said executive compensation structures are broadly similar at all three quoted grocers, combining basic salary, bonus and various long-term incentives.

However, at Tesco and Sainsbury’s there is a higher participation in equity and options beyond the management. Bernstein analyst Chris Hogbin observed: “Since frontline employees are critical to the success of a retail business, this equity participation is an important factor.”

Hogbin said investment decisions should not be based on compensation packages, but noted: “Tesco is differentiated by having the highest level of compensation and equity ownership for the management team, potentially providing a greater incentive to perform.

“Moreover, equity – and option – ownership is broader for staff at Tesco than elsewhere.”

The broker said that Tesco chief executive  Sir Terry Leahy generates £37,000 of sales and £1,524 net income for each £1 of his base salary, compared with £18,000 and £711 respectively for Morrisons chief executive Marc Bolland.