Tesco boss Ken Murphy paid £4.4m as prices rise and many customers struggle to put food on the table
The boss of Tesco earned more than £4.4m last year despite profits halving at the supermarket and many customers having to buy less as price rises forced them to cut back.
Ken Murphy was rewarded with a remuneration deal that was 197 times that of the average Tesco worker, the supermarket’s annual report revealed.
It included a salary of £1.37m as well as £2.7m in performance bonuses together with other benefits and pension payments.
Mr Murphy’s deal was less than the £4.75m package he was awarded the year before after the company missed some targets, including profits which halved to just over £1bn.
Tesco said the chief executive would get a salary rise of 3 per cent next year, “considerably lower” than the 8 per cent store staff received.
The group’s finance chief, Imran Nawaz, received a £3m total pay package for the year, including £1.36m in bonuses. He will receive a 4 per cent rise in pay.
Tesco, Britain’s biggest retailer, raised hourly pay for about 220,000 store workers in April. The supermarket said the increase, the third in less than a year, was part of a £430m investment in pay.
Mr Murphy’s pay follows comments by Julia Hoggett, the chief executive of the London Stock Exchange, who claimed UK bosses are paid too little by international standards, arguing that increased pay for directors will help Britain retain talent, keep jobs and profits.
The High Pay Centre, a think tank which studies economic inequality, said “anyone suggesting raising executive pay is risks appearing seriously out of touch.”
It said polling found that in the context of the current cost of living crisis, which has seen workers experiencing the fastest decline in living standards in 60 years, most people consider existing levels of chief executive pay excessive.
Tesco’s top executive pay arrangements also come at a sensitive time for supermarket bosses. In March, UK food and drink inflation rose to 19.1 per cent, the highest level since 1977. The Unite union accused some retailers of “fuelling inflation by excessive profiteering”.
Tesco, together with other major grocers, has been criticised for the poor availability of low-cost, own-brand goods at local stores where many low income-groups predominantly shop.
The grocery sector faces growing political pressure to take action against high food prices, with Rishi Sunak, set to host a meeting of major suppliers, retailers and industry bodies in Downing Street next week.
Supermarket bosses, who deny they are responsible for the high prices, told Treasury ministers in a virtual meeting on Thursday that they believe food prices are now on the way down as producer prices decline due to falling energy prices and improved supply chains.
Analysis by the Bank of England also suggested that financial hedging strategies by agricultural commodity and food production groups may have resulted in delays which meant falling prices were not passed on to consumers as quickly as economists expected them to be.
