Tesco boss sees bonus trimmed 7% to £5.1m

The chief executive of Tesco, Sir Terry Leahy, had his total remuneration trimmed by 7 per cent last year, as the world's third-largest retailer failed to meet performance targets at its fledging grocery operation in the US.

Sir Terry's lucrative package for the financial year just ended was cut to £5.1m, down from £5.47m the previous year, as he received less than half of the his maximum bonus in deferred shares, largely because of the slower opening programme of its Fresh & Easy convenience stores in California, Nevada and Arizona.

The decision by Tesco – which delivered record pre-tax profits of more than £3bn in 2008-9 – to cut his bonus comes at a time when boardroom pay is under the spotlight like never before.

For the 53 weeks to 28 February 2009, Sir Terry pocketed a salary of £1.36m, as well as total performance-related bonuses of £3.66m, according to its annual report published yesterday. He could pocket about £11.5m in long-term share bonuses if Tesco hits its US and international targets.

The grocery giant launched Fresh & Easy to a fanfare in November 2007 and, at the time, vowed to have about 200 stores by the end of February 2009. But the savage economic downturn in the US – particularly in cities such as Las Vegas and Phoenix, which have been battered by the housing collapse – has caused it to throttle back on its expansion programme, leaving Fresh & Easy with just 115 shops currently. It plans to open about 60 stores this year.

The number of stores was one of the "US-specific" development target missed by Tesco, which meant that Sir Terry only received 45 per cent of the maximum for the deferred shares element of his annual bonus.

A Tesco spokesman said: "It is a good bonus, but in relation to the US there have been some adjustments because we have not hit all the targets out there." However, Tesco said it had made progress on US-specific targets on measures, including sales growth, cost management and customer service in the US. Tim Mason, the chief executive of Fresh & Easy, was also only awarded 45 per cent of his potential maximum bonus.

In April, Tesco said its initial trading losses in US were higher than expected at £142m and it expects a similar loss this financial year. After its record-breaking year, Tesco said that more than 207,000 of its staff will share a bonus pot of £98m.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss