Tesco CEO’s $13 Million Pay Package Under Scrutiny Amid Cost of Living Crisis

At Tesco’s upcoming annual meeting, the board will face shareholder scrutiny over CEO Ken Murphy’s nearly $13 million pay package. Amid rising living costs, investors are increasingly challenging what they view as excessive executive compensation. Tesco, which reported an 11% profit increase for 2023/24 and saw a 15% year-on-year rise in its share price, will hold the shareholder meeting following an update on first-quarter trading.

Murphy’s pay, detailed in Tesco’s annual report last month, showed a significant increase to $12.63 million for the year ending February 24, 2024, up from $5.65 million the previous year. According to ShareAction, a responsible investment group, this figure is 430 times the average salary of a Tesco employee.

ShareAction intends to question Tesco’s board on the justification for Murphy’s high pay, especially when contract cleaners and security staff are earning less than the “real Living Wage.”  Representing $6.6 trillion in assets, ShareAction’s Good Work investor coalition, which includes prominent members like LGIM, HSBC Asset Management, Aviva, NEST, and Scottish Widows, is advocating for all major UK supermarkets to become Living Wage employers. This accreditation would ensure that all staff, including third-party contractors, receive the real Living Wage consistently.

Dan Howard, head of Good Work at ShareAction, criticized Tesco for not moving faster to ensure fair wages for all contracted staff. In response, Tesco stated that a significant portion of Murphy’s compensation reflects his success in meeting challenging targets in a highly competitive market, creating value for various stakeholders. The company emphasized its commitment to providing competitive and fair compensation for all employees.

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