Outlook For those who regard the scale of the rewards paid to its executives as excessive, Tesco's insistence that "every little helps" is not likely to play any better for yesterday's revamp of its remuneration policy. This, after all, is a company that handed even its lowest-paid director more than £1.7m last year.
Still, for those who worry more about the structure of pay than matters of quantum – probably most of the 47 per cent of shareholders who refused to back its remuneration report last year – the reforms the grocer is making will be welcome.
Essentially, they are an attempt to more closely align executive pay with the long-term performance of the company. Shifting the balance away from basic pay in favour of rewards linked to metrics such as return on capital employed is the right way to incentivise senior managers. The new scheme is also more transparent than the hotch-potch of arrangements it replaces.
There are a couple of quibbles. Tesco is seeking to raise the size of the bonus it is able to pay its chief executive, despite the substantial incentives already available. And while the abandonment of the link between the pay of Tim Mason, Tesco's man in the US, and the grocer's performance there is partly a recognition of investors' disquiet about what Mr Mason has been paid in the past, there is surely some merit in having an explicit relationship between the results achieved by what is a struggling division and the rewards offered to the man who runs it.
Still, broadly speaking, Tesco deserves credit for responding positively to last year's revolt. It is also worth pointing out that Tesco has a good record on sharing the spoils with rank and file staff – more than 200,000 staff were last week awarded shares in the company worth £110m. In that sense, Tesco differs from the companies criticised by Manifest, the governance specialist, this week for raising executive pay while failing to reward the rest of the workforce.
The broader point is that Tesco's overhaul is proof that it is not a waste of time for shareholders to make a fuss about pay, as some investors were beginning to think.
Contrast its willingness to listen to the attitude of, for example, the chairmen of Standard Life and Prudential, both of whom last week gave every impression of being supremely unconcerned about the concerns of their shareholders about executive pay.
Tesco may be in the minority so far in accepting criticism in this way, but its reaction will encourage investors to continue to be bolshy. Remuneration committees elsewhere will also take note. Everylittle really does help.