Tesco CEO receives 10% pay cut despite sales increase
Tesco CEO Dave Lewis has seen his pay reduced by 10% to £4.1m ($5.28m) due to a lower annual bonus, despite the supermarket reporting its first annual increase in sales in the UK in seven years. The company’s remuneration committee said the bonus reflected the extent to which Lewis had met annual “stretching” targets. Tesco’s profits rose 30% to £1.28bn and group revenues increased 3.7% to £55.9bn in the 2016/17 financial year, according to the firm's annual report.
Tesco boss Dave Lewis saw a 10 per cent cut to his pay packet last year after receiving a lower annual bonus, but still pocketed £4.1million.

The cut came despite Tesco last month reporting its first annual increase in UK sales for seven years, with the grocery giant's operating profits rising 30 per cent to £1.28billion, while group revenues increased 3.7 per cent to £55.9bn.

Lewis, who took home £4.6m in 2015/16, including a £3m bonus, last year pocketed £4.1m comprising his salary, a £2.36m performance related bonus, benefits and pension, according to Tesco’s annual report published today.

Pay cut: Tesco boss Dave Lewis received a £4.1m pay day last year, despite taking a 10% pay cut

The retailer’s remuneration committee, which decides how much top executives should be paid, said the level of bonus paid to Lewis was based on how far he had met the 'stretching' targets set for the year.

Lewis's base salary, however, remained unchanged at £1.25m, while he received £223,000 in benefits and a £313,000 pension contribution.

His salary is 42 per cent lower than the £7.15m Sir Terry Leahy trousered in his final year as chief executive in 2010/11, yet more than double the £1.63m his predecessor Philip Clarke picked up before handing over the reins in 2013/14.

Since taking the helm, Lewis has been hailed for leading the supermarket’s turnaround.

The second-best-paid executive was finance chief Alan Stewart, who was awarded £2.2m last year, down 14 per cent from £2.6m a year earlier after his bonus was cut from £1.6m down to £1.2m on top a £750,000 base salary.

Tesco chairman John Allan, meanwhile, was paid £666,000 in 2016/17, up from £660,000 the previous financial year.

Deanna Oppenheimer, chair of the remuneration committee, said Tesco had performed well in a tough year for retailers: 'Tesco has had a year of strong progress, delivering against the three turnaround priorities of improving competitiveness in the UK, a more secure balance sheet and rebuilding trust, which were set in 2014.

'A stable platform has been established and a strong performance delivered in spite of significant external challenges, which made 2016-17 another challenging year for retailers.'

Bitter taste: Last year, Tesco became embroiled in a row with supplier Unilever over price hikes of some of its major brands including Marmite

Despite its recent success, the retailer has been stung this year by a £235m hit after reaching an agreement with authorities over its 2014 accounting scandal, resulting in a hefty compensation payout to investors.

The supermarket is also grappling with investor pressure over its £3.7bn takeover tilt for food wholesaler Booker, which was agreed in January.

Last year, Tesco became embroiled in a row with supplier Unilever over price hikes of some of its major brands including Marmite.

Tesco is aiming to slash costs by £1.5bn over the next three years to help boost margins, with thousands of jobs at risk as part of plans to cut back on night shifts and trading hours.

The retail giant also said in March that it is to reimburse 140,000 current and former workers almost £10m following payroll errors.