Tesco shareholders encouraged to revolt at AGM over Dave Lewis’ pay, Philip Clarke’s golden goodbye and John Allan’s appointment as chairman

Tesco shareholders are being encouraged to stage a revolt at the supermarket's AGM on Friday, with investor group Pirc advising they vote against key resolutions. 

 

Chief executive Dave Lewis' pay could come under particular scrutiny if Pensions and Investment Research Consultants – one of the largest investor groups in the UK – gets its way. And that could also trickle through to the rest of the executive board. 

 

Including all incentive schemes, Lewis stands in line to receive a bonus worth 525 per cent of his salary “which is deemed excessive”, Pirc said. The ratio of his pay to the average salary is also too high. 

 

It added: “The salary of the new chief executive is high compared to salaries of others in the peer group. This raises concerns about the overall remuneration structure, as awards are directly linked with salary levels.

 

“Changes in chief executive pay over the last five years are not considered to be in line with changes in Tesco’s total shareholder return performance over the same period.” 

 

 

And payments made to former chief executive Philip Clarke and his chief financial officer Laurie Mcilwee are also a concern.

 

“In Pirc's view the track-record of these two executives at the head of the company was particularly poor,” it said in a note. 

 

The group is also recommending shareholders vote against John Allan as chairman, given his current role as chairman of Barratt Development. 

 

“The role of the chairman is considered crucial to good governance as they are primarily responsible for the culture of the board, and by extension the organisation as a whole and for ensuring that the board operates effectively.

 

“As such, we consider the chairman should be expected to commit a substantial proportion of his or her time to the role.”