Tesco checkout staff see bonus pot halved as profits slump

 

Checkout staff at Tesco have seen their annual shares bonus pot halved after the supermarket giant slumped to its first annual profits fall in nearly 20 years.

The retailer said 280,000 UK staff will share a payout worth £56 million, down from £110 million a year earlier and worth a maximum of £1,625 per worker.

About 5,000 top managers and its board have also been denied bonuses and long-term shares awards after the retailer's 2012/13 performance "fell short of where we wanted it to be", its annual report revealed.

Tesco endured a "challenging" year in 52 weeks to the end of March, with bottom line pre-tax profits diving 51.5% to £1.96 billion as it was hit by slowing sales growth and a raft of hefty writedowns.

These included an £804 million charge from its decision to scrap more than 100 major store developments in the UK. It also took a £1.2 billion hit from its failed foray in America and is offloading its loss-making Fresh & Easy business.

Tesco is instead focusing on reinvesting profits in its existing UK business and expanding online, part of a £1 billion overhaul.

Chief executive Phil Clarke took home £1.17 million during the year, up marginally on a year earlier, comprising a salary of £1.11 million and £57,000 in benefits. That compares with a £7 million potential package.

Finance director Laurie McIlwee saw his total pay fall almost 20% to £917,000, the report showed.

Mr Clarke and Mr McIlwee missed out on long-term shares worth a combined £2.4 million when the awards lapsed because of the missed performance targets.

Tesco's top 5,000 bosses earned 16.9% of their bonus potential a year earlier.

Stuart Chambers, chairman of the group's remuneration committee, said: "This demonstrates that our remuneration policy is effective in aligning pay with performance".

The £56 million staff shares award is equivalent to 1.5% of an employee's earnings, and is payable to workers who joined the group before February 25. Shares are held in trust and can be sold after three years.

A spokeswoman said while the staff payout is not tied to specific measures, "it's not been a secret that it's been a challenging year for the business".

The retailer also unveiled a new campaign to cut food waste from its operations, supply chain and among customers, part of its Tesco and Society report.

It aims to tackle the £680 a year of food wasted by households, and includes selling food in smaller sizes in its convenience stores, and tailoring promotions away from goods with shorter shelf lives.

Mr Clarke has admitted it may mean customers buying less food from Tesco, but said the supermarket has a responsibility to tackle a "long-term risk to society".

PA

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