James Davey
LONDON (Reuters) – The board of Tesco (OTC:), Britain’s biggest supermarket group, will be asked to justify CEO Ken Murphy’s nearly 10 million pounds ($13 million) payout when the company meets shareholders at its annual meeting on Friday.
Investors have become more vocal in opposing pay increases for board members, which they see as excessive amid the cost-of-living crisis.
Tesco’s annual report published last month showed Murphy was paid £9.93 million for the year to February 24, 2024, up from £4.44 million in 2022/23.
His salary was 430 times that of the average Tesco employee, according to responsible investment group ShareAction.
He plans to ask the Tesco board how they can justify Murphy’s salary while contract cleaners and security staff are paid less than the so-called real living wage.
The Real Living Wage, set up by the charity The Living Wage Foundation, is a calculation of the minimum hourly rate workers need to afford housing, food and other basic needs.
It currently stands at £13.15 per hour in London and £12 per hour in the rest of the UK, which is higher than the UK government’s main minimum wage, the National Living Wage, of £11.44 per hour.
The Good Work ShareAction investor coalition represents $6.6 trillion in assets under management. Members include LGIM, HSBC Asset Management, Aviva (LON:), NEST and Scottish widows.
It calls for all major UK supermarkets to become accredited as a living wage employer, guaranteeing all staff, including third party contractors, receive a real living wage on an ongoing basis.
“It’s unfortunate that Tesco has been slow to take the right steps to pay a living wage to its third-party contract staff,” said Dan Howard, head of Good Work at ShareAction.
Tesco said last month that much of Murphy’s overall package reflected his “achieving ambitious goals in a highly competitive sector and working to create value for customers, colleagues, suppliers, communities and shareholders”.
The company added that it “remains committed to ensuring competitive and fair remuneration for all colleagues.”
In April, Tesco reported an 11% rise in 2023/24 profits. The company’s shares are up 15% year over year.
The shareholders meeting will take place after Tesco reports its first quarter trading results.
($1 = 0.7850 pounds)