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

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence