Tesco avoids AGM revolt as investors back CEO’s pay rise

The supermarket giant had been under fire from responsible investment NGO ShareAction, after it was first reported in The Guardian that group Murphy’s pay was being upped to £10m a year.

ShareAction had been critical of the move, saying: “In a world where Tesco is making £2.3bn profit a year, paying those who keep the stores safe and clean the real living wage shouldn’t have to be asked for – it should be automatic.”

The retailer faced investors at its AGM today and was all set to justify the pay increase for Murphy but the mooted rebellion never materialised.

In the end, all the resolutions put forward at the AGM were passed. On the topic of Murphy’s pay increase, just 6.5% of votes went against the remuneration report.

The AGM was held on the same day that Tesco reported “strong” sales growth in its first quarter. At the time of publication, Tesco shares had jumped 1.9% to the top of the FTSE 100.

Tesco chair Gerry Murphy said he had “no difficulty” in defending the board’s decision to increase Murphy’s pay.

He said: “I have no difficulty in defending Ken’s absolute level of pay given the complexity [and] scale of the business, but also particularly its performance.

“We do recruit from time to time at very senior levels from the global market and frankly we just have to be competitive with that market.”