Tesco Plc (TSCO) Chief Executive Officer 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 trading profit fell 6 percent to 3.32 billion pounds ($5.6 billion) in the year ended Feb. 22 as more Britons defected to budget retailers Aldi and Lidl, and international earnings sank. The fourth-quarter’s 2.9 percent drop in U.K. same-store sales was the worst performance since at least 2001.
Clarke and outgoing Chief Financial Officer Laurie McIlwee are not the only U.K. 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 pounds from 1.28 million pounds last year, boosted by a 391,000-pound pension addition, the report shows. McIlwee’s pay went to 1.54 million pounds from 1.37 million pounds.
The CEO’s “actual pension accrual in the year was 33,000 pounds,” Tesco said in a subsequent statement. The final figure “is affected by changes in the CPI rate of inflation.”
McIlwee, who resigned in April, will continue to receive his 886,420-pound per annum salary and remain eligible for a bonus until he leaves in October. On departure, he will get a termination payment of 970,800 pounds, the report shows.
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