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Tesco staff pay the price for profit slump as shares bonus pot halved

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 £56m, down from £110m 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 £1.96bn as it was hit by slowing sales growth and a raft of hefty writedowns.

These included an £804m charge from its decision to scrap more than 100 major store developments in the UK. It also took a £1.2bn 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 £1bn overhaul.

Chief executive Phil Clarke took home £1.17m during the year, up marginally on a year earlier, comprising a salary of £1.11m and £57,000 in benefits.

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That compares with a £7m potential package. 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 £56m 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 for the company said that 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".


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