Tesco faces investors amid pressure over pay

Click to follow
The Independent Online

Tesco faces investors at its annual general meeting later today amid mounting pressure on the UK's biggest supermarket.

The retail giant holds its AGM - the last for chief executive Sir Terry Leahy before he steps down next March - as it comes under fire over pay issues and alcohol pricing.



There is growing unrest over the pay packet of its US boss, brought to the fore when a lobby group urged shareholders to vote in protest at today's meeting.



CtW Investment, which works on behalf of pensions funds linked to US unions, balked at what it claimed was "excessive" compensation awarded to Tim Mason - the boss of Tesco's loss-making US chain Fresh & Easy.



Mr Mason received £4.3 million in the company's 2009/10 financial year, up from £3.8 million a year earlier, despite a £165 million loss at the US venture.



But Tesco hit back, citing its strong performance in the last year against difficult economic conditions.



It also pointed out that the Association of British Insurers recently published a supportive report on Tesco for shareholders and said its approach to executive pay was based on rewarding good long-term performance.



The chain may also be forced to defend itself against complaints over its pricing policy on alcohol after MPs condemned the group for reportedly selling lager at below cost price.



Liberal Democrat Bob Russell yesterday tabled a Commons motion, backed by 10 other MPs, calling on the store's shareholders to speak out at its AGM.



The coalition Government said supermarkets and off-licences will be banned from selling alcohol below cost price - with Sir Terry only last month saying he was in favour of a minimum price.



But an investigation by the Mail on Sunday claimed the supermarket sold Stella Artois lager at 6p below the cost of tax and excise duty alone.



In the motion, Mr Russell said he "deplores the behaviour of Tesco in selling lager below cost price only a month after calling on the Government to outlaw the practice".



Tesco's investor gathering comes ahead of a difficult year for retailers, with new Government measures and an impending VAT hike to 20% adding to already difficult trading conditions.



Plunging food price inflation is hitting food sales growth - leaving Tesco's like-for-like figures up just 0.1% in the three months to May 30.



However, the group said it still expects sales to rise by around 3% over its full financial year.

Comments