London: Tesco boss Philip Clarke has opted not to take an annual bonus of about £372,000 ($588,000) following a poor performance by the world’s third-biggest retailer in its main British market.
Shares in Tesco, which issued a shock profit warning in January, have lost almost a quarter of their value this year and the company is now investing about £1 billion in a bid to stem a declining market share in Britain.
A statement on Tesco’s website on Tuesday, to coincide with the publication of the retailer’s annual report, said its top 5,000 managers would receive a reduced annual bonus representing 16.9£ of their maximum entitlement.
Tesco CEO Philip Clarke. Photo: Bloomberg
Executive directors will receive 13.5% of the maximum.
“I decided at the beginning of the year that I would decline my annual bonus for 2012,” Clarke said in a statement emailed to Reuters.
“I wasn’t satisfied with the performance in the UK and I won’t take the bonus. I’m confident that we’re tackling the right issues.”
Clarke, a former Tesco shelf stacker, would have been entitled to a payout of about £372,000 had he taken the 13.5% being paid to other executive directors.
The Tesco chief executive’s decision comes amidst a round of high profile shareholder revolts over remuneration at companies like Barclays, Inmarsat and Prudential in a phenomenon dubbed the “shareholder spring”.
Increasing investor resistance to executive pay rises at underperforming firms has also led Aviva boss Andrew Moss, and Sly Bailey, head of newspaper group Trinity Mirror, to quit this month.
In March, Clarke jettisoned the head of Tesco’s UK operation, assumed his duties and is now directly in the firing line if his plans fail to halt a slide in sales.
Tesco shares were broadly flat at 0935 GMT at 309.85 pence.