The boss of Tesco earned almost £4.5m last year despite profits halving and price rises for shoppers.
Ken Murphy’s total £4.4m package compared with £4.7m a year earlier, after his bonus dipped because of missed targets on profits and food waste. His basic salary rose 1.7% to £1.4m.
The chief executive’s basic salary has risen another 3% this year. That means his total pay package in the year ahead, including his annual bonus, could reach up to £5m, with a further £3.9m in long-term bonuses lined up depending on his performance over the next three years.
Tesco, which owns the Booker grocery wholesaler and runs stores in eastern Europe and the Republic of Ireland as well as the UK, has said it expects underlying operating profit to remain flat in the year ahead, pledging to “prioritise investment in our customer offer while doing everything” it could to “offset the impact of ongoing elevated cost inflation”.
Supermarkets are under pressure to take action against soaring food prices, with the prime minister, Rishi Sunak, set to host a meeting of big suppliers, retailers and industry bodies in Downing Street on Tuesday.
In a phone meeting on Thursday night, supermarket leaders told government officials they believed inflation was easing.
The price of some key foods, including milk, butter and bread, have been cut in recent weeks at major chains. However, overall food prices are expected to continue to rise throughout the second half of this year as energy and labour costs remain high.
The consumer group Which? has criticised Tesco and other big supermarkets for not doing enough to keep down the cost of essential foods in the face of cost price inflation in raw ingredients, fuel and wages.
It has highlighted the poor availability of supermarkets’ budget own-label ranges in their small local stores, where many people on low incomes shop, as well as high inflation on those products compared with the major brands.
Announcing a £516m end-of-year dividend for shareholders last month, compared with a £588m payout the year before, Murphy said: “I feel very comfortable with what we are doing for shareholders as it is balanced relative to other stakeholders we have a responsibility to look after.”
