Tesco, Sainsbury’s and Morrisons execs scoop hefty bonuses

Bosses of Tesco, Sainsbury’s and Morrisons have all taken home share-based rewards based on their performance in their latest financial years – despite the latter two businesses deferring decisions on dividend payments amid the coronavirus crisis.

Tesco chief executive Dave Lewis was handed a £6.4m pay package for the grocer’s performance during its 2019/20 financial year – the largest remuneration of any Tesco executive since the departure of Sir Terry Leahy in early 2011.

Lewis’ total pay jumped more than a third after an increase in annual and long-term bonus payouts.

On top of his basic £1.6m salary, Lewis was handed a £2.4m annual cash bonus alongside a £2.4m long-term share bonus, according to Tesco’s annual report.

Lewis’ long-term share bonus was boosted by £1.6m based on Tesco’s share performance against rival retailers after the supermarket giant’s remuneration committee decided to remove Ocado from the list of competitors it used as a benchmark.

Had Ocado’s share price been included, Lewis and Tesco’s finance chief Alan Stewart would have lost out on £2.5m in share bonuses between them.

Tesco said in its annual report that it removed Ocado back in May 2018 as a result of its “significant shift away from being a retail-focused business towards a technology-focused business”.

The move meant Lewis, who is leaving Tesco at the end of September, received the largest remuneration package of any of the grocer’s chief executives since Leahy netted £7.1m during his final year at the helm.

Tesco’s bonus packages were revealed on the same day it emerged that Morrisons boss David Potts took home £4.2m last year, including a long-term share bonus of £2.3m. That was slightly down, however, on the £4.5m he earned the previous year.

Details of his remuneration emerged two months after Morrisons said it was deferring a decision on a special dividend amid the coronavirus crisis in order to maintain “flexibility around how we prioritise uses of our strong cash flow”.

Sainsbury’s has given almost £2m in shares to nine members of its senior team, including outgoing boss Mike Coupe and his successor Simon Roberts.

The executives were awarded 950,000 shares between them – worth £1.85m – for the financial year to March, just two weeks after Sainsbury’s deferred a decision on its final dividend.

Coupe will receive less than his allotted 239,000 in bonus shares as a result of stepping down at the end of this month.