Ken Murphy, the chief executive of Tesco, has seen his remuneration package increase significantly to £9.93 million (€11.5 million), more than double his earnings last year. This considerable salary rise entails that the Irish boss’s pay is 431 times more than the average Tesco employee, who earns around £23,010 a year. Tesco’s annual report disclosed that Mr Murphy, originally from Cork, was handed close to £10 million in pay for the yearly period ending in February, seeing a considerable increase from the previous year’s total pay package of £4.44 million.
The considerable change in Murphy’s earnings is primarily accounted for by £4.91 million received through his performance share plan (PSP), following notable increases in Tesco’s profits despite difficult inflationary conditions. The PSP payment will be disbursed in the form of Tesco shares and is contingent upon the company’s performance since 2021. This is in addition to his yearly pay of £1.64 million and his annual bonus of £3.38 million.
Similarly, Imran Nawaz, the chief financial officer of the group, also received a doubled annual pay. His total compensation for the year was £4.95 million, up from £2.27 million the preceding year. This substantial rise came after Tesco reported an adjusted operating profit of £2.83 billion for the year ending in February, indicating almost a 13 per cent rise from the previous year.
Despite their economic success, Tesco received disapproval when revealing such impressive profits during a time when many customers have been adversely affected by rampant inflation on food and drink prices, triggered by supply chain disruptions and the Ukraine invasion by Russia.
The chairwoman of the Tesco remuneration committee, Alison Platt states that the significant award compensates Tesco’s successful performance during the last year, despite managing the complexities of a large scale business like Tesco. It recognizes the companies achievements from creating competitive customer offers to record-investment in colleague pay. Platt added that Tesco remains committed to providing an equitable reward strategy for colleagues and has made substantial investments in their pay over the last two years, spending over £800 million, while also enhancing the wellbeing benefits on offer.