Philip Clarke and other top managers will miss out on their annual bonuses for a second year running after failing to reverse falling profit at Britain’s largest grocer.The “profit underpin was not met and therefore the executive directors will not receive a bonus in respect of 2013/14,” Stuart Chambers, chairman of Tesco’s remuneration committee, said in the retailer’s annual report today. Tesco said last year no bonuses would be paid unless profits grow.
So-called group trading profit fell 6% to £3.32 billion ($5.6 billion) last year as more Britons defected to budget retailers Aldi and Lidl, and international earnings sank. The fourth-quarter’s 2.9% drop in UK same-store sales was the worst performance since at least 2001.
Clarke and his outgoing Chief Financial Officer Laurie McIlwee are not the only UK retail bosses not to receive bonuses. Dalton Philips, CEO of William Morrison Supermarkets Plc and Marks & Spencer Group Plc (MKS) head Marc Bolland are also losing out.
Still, Clarke and McIlwee received an increase in their total remuneration as a result of higher pension contributions. Clarke’s pay rose to £1.63 million from £1.28 million last year, boosted by a £391,000 pension addition, the report shows. McIlwee’s pay went to £1.54 million from £1.37 million.
McIlwee, who resigned in April, will continue to receive his salary of £886,420 per annum and remain eligible for a bonus until he leaves in October. On departure, he will get a termination payment of £970,800, the report shows.
