Tesco faces investor revolt over boss Dave Lewis’ relocation deal

In a report ahead of the grocer’s annual meeting next week, Pirc advised Tesco shareholders to oppose the retailer’s remuneration report, arguing that a 179% increase in benefits for boss Lewis is “not considered appropriate”.

The increase is believed to have been given to Lewis to cover his stamp duty and legal fees, which he incurred when relocating from London to the Hertfordshire area, close to Tesco’s Welwyn Garden City head office.

Former Unilever exec Lewis replaced Philip Clarke at the helm of the supermarket giant in September 2014.

Pirc added that the long-term incentive plan awarded to Lewis during the year was also excessive, at more than 200% of his salary.

The group said: “This raises concerns about the potential excessiveness of the remuneration structure, as incentive awards are directly linked with salary levels.”

Lewis had his total pay package cut by 10% last year to £4.1 million, despite his turnaround plans for Tesco starting to bear fruit.

His bonus fell from £3m to £2.36m.

Pirc’s report also suggested Tesco investors vote against the re-election of chairman John Allan on the basis that he is also chairman another FTSE 100 company, Barratt Developments.

Tesco declined to comment.

The supermarket giant, which registered a 29.9% jump in operating profit to £1.28bn in the year to February 25, could also face some criticism over its pursuit of Booker at its AGM.

Two of Tesco’s largest shareholders, Schroders and Artisan Partners, have hit out at the proposed £3.7bn deal.

Both investor groups – Tesco’s third- and fourth-largest shareholders respectively – wrote to Tesco chairman Allan separately earlier this year, urging him to pull the plug on the merger.

Schroders fund manager Nick Kirrage and global head of stewardship Jessica Ground said in their latter: “All management teams believe that their acquisitions will create value.

“However, there is compelling academic and empirical evidence that, on average, acquisitions destroy value for acquiring shareholders.”

The merger is being investigated by the Competition and Markets Authority,