Tesco share price: Bosses miss out on annual bonuses

on May 22, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Thursday, May 22: Tesco CEO Philip Clarke and outgoing finance director Laurie McIlwee, will not be paid an annual bonus for the fiscal 2013-14 year, after Britain’s largest retailer posted a six percent fall in profit.

Tesco’s short-term bonus available is 50 percent based on the company’s profitability, 26 percent on strategic financial performance and 24 percent on strategic non-financial performance. Tesco said last year that no bonuses would be paid unless profits grow.
According to Tesco’s annual report, published today, the company made good progress against its key strategic objectives that were designed to strengthen its underlying business. Tesco’s internet sales increased 15 percent, it received better feedback from customers and colleagues, and there was a significant reduction in the level of CO2 used across the group, it noted.

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“Despite this progress the bonus profit underpin was not met and therefore the Executive Directors will not receive a bonus in respect of 2013/14,” the report said.
Clarke’s salary is still nearly 30 percent more than it was in 2012 despite continued underperformance at the supermarket chain, although this is largely because of a change in the way his pension top-up payments are accounted for. For the current year, Clarke’s basic salary will rise £9,000 to £1.145 million.

Tesco’s board said it would be reviewing directors’ pay and incentives this year and would produce a new pay framework which would be put to shareholders at the annual meeting next year.
Last month, Tesco reported a six percent fall in annual profit, marking a second straight year of shrinking earnings for the group (Tesco share price: Retailer posts 6% full-year profit fall).

Clarke is under intense pressure because despite having spent over £1 billion on a turnaround programme for Tesco’s British business, it is still losing market share. The grocer’s problems have been exacerbated by the April 4 resignation of McIlwee, leaving Clarke as the only executive director on Tesco’s board (Tesco share price: Finance director to leave ahead of full-year report). However, the CEO has vowed to win back shoppers with millions of pounds of price cuts.

**Tesco share price falls**
Tesco’s share price has been trading in a negative territory so far today. As of 10:52 BST, the retailer’s stock was changing hands at 302.05p – 0.59 percent down on the day.
Of the 17 analysts projecting 12 month price targets for Tesco for The Financial Times, the median target is 282.00p, with a high estimate of 360.00p and a low estimate of 230.00p.
**As of 10:39 BST, buy Tesco shares at 302.90p.**
**As of 10:39 BST, sell Tesco shares at 302.85p.**


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