Three Tesco executives take home £1m in pay

Author: By Saeed Shah

Tesco executives are believed to be the best-paid group of directors in the country, after it emerged yesterday that three board members received packages worth over £1m in 2000.

A further three executives received packages worth over £800,000, which would have been pushed over the £1m mark if they had exercised additional share options.

Terry Leahy, chief executive since 1997, led the Tesco millionaires club, with a package last year worth £1.6m, up 37 per cent on 1999, made up of a £771,000 salary plus bonuses.

The details, revealed in the company’s annual report, are likely to fuel criticism of Tesco from farmers and consumer groups, who hit out at its recent announcement of profits for the year that topped £1bn.

Yesterday, City experts ­ generally Tesco fans ­ said its pay levels would be questioned by investors. Paul Smiddy, an analyst at Credit Lyonnais, said: “Tesco has always been a well-renumerated board. Every year when I open the report and accounts, I am amazed by the level of salary and bonuses.”

Another analyst put it more bluntly: “I think they are taking the piss. They’re overpaid.”

David Reid, Tesco’s deputy chairman, saw a 27 per cent boost in his renumeration, to £1.3m, while John Gildersleeve, commercial and trading director, received £1.2m.

A spokesman for the company said: “Tesco is a successful company, and these men contributed in large measure to that success. You have to set their pay against the £6bn of value they created for others [investors]. Total shareholder returns last year were up 62 per cent.”

The spokesman pointed out that bonuses at Tesco are paid in shares, which cannot be sold for two or four years, depending on whether it is a short-term award or a long-term one.

Other Tesco directors to share in the pay bonanza were: Tim Mason, marketing director, who got £874,000, plus £318,000 in share options; Andrew Higginson, finance director, £809,000 and options valued at £445,000; and company secretary Rowley Ager, £862,000 and options worth £795,000.

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