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The boss of the UK’s biggest supermarket chain said he “absolutely accepted” he was “well paid” as investors decided whether to support his £10m pay package on Friday, at a time when executive pay UK has risen high on the corporate agenda.
Tesco CEO Ken Murphy’s salary more than double to £9.9m in the year to the end of February, thanks largely to performance-linked bonuses of £8.3m, making him one of the highest-paid British supermarket bosses.
Asked about his remuneration ahead of a non-binding shareholder vote on Friday, Murphy said: “[I] I absolutely accept that I am well paid,” but added that the remuneration was set by the board “as delegated by the owners of the company, the shareholders” and was variable, depending on demanding objectives.
Two influential shareholder advisory groups, Institutional Shareholder Services and Glass Lewis, have asked investors to vote in favor of the compensation report.
The Tesco shareholders meeting comes as a number of large UK companies have sharply increased the pay of their senior executives in recent months to resolve an ever-widening gulf with their American counterparts.
FTSE boards have come under pressure to increase chief executive pay to compete with transatlantic rivals, with shareholders in companies including AstraZeneca They recently voted in favor of big pay increases for their CEOs, despite opposition.
Murphy’s salary is currently significantly higher than his rivals, with the exception of a proposed pay package of almost £15m for Ocado chief executive Tim Steiner, which attracted anger of investors at its annual meeting in April. The boss of Sainsbury’s, the second largest supermarket, received just under £5m last year.
Since Murphy joined the retailer in October 2020, he has presided over a 15 percent rise in its share price. Earlier this year, the FTSE 100 company forecast a rise in profits and announced a £1 billion share buyback.
Ahead of the July 4 general election, Murphy said he wanted “stability and consistency” from the next government “because they allow businesses to plan and invest and I think those are critical features of any government”, refusing to endorse any party.
On Friday, Tesco said it was gaining market share from other supermarkets “more than at any time in the last two years” as it posted a 3.4 rise in like-for-like retail sales to £15.3bn in 13 weeks until May 25. , powered by fresh food and clothing.
Customers were “switching to us from other retailers, shopping with us more frequently and with more things in their baskets.”
Murphy added that the business was “well positioned for the coming months” and maintained its retail adjusted operating profit forecast of at least £2.8bn for the year.
He said he expected inflation to remain in “very low single digits” for the rest of the year. Annual food price growth fell to 3.2 percent in May, down from 3.4 percent in April and the lowest. from February 2022.