AGM alert: Tesco boss earns most in 10 years

A £9.9 million pay package for the boss of Britain’s biggest supermarket chain will be under scrutiny when shareholders gather for the Tesco (LSE:TSCO) AGM in mid-June.

Ken Murphy’s total compensation jumped from £4.4 million the year before, partly due to the 85% vesting of his first share awards under the company’s long-term incentive scheme.

In a year of continued cost of living pressures, Tesco said its remuneration was driven by strong performance and reflected the complexities of managing a business of its size and scale.

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Tesco

When: 11.30am, Friday, 14 June.

Where: Heart building, Shire Park, Welwyn Garden City, AL7 1TW.

How to participate:  A live webcast is available online but this is not interactive and it will not be possible to vote or ask questions. Proxy voting instructions should be returned no later than 11.30am, Wednesday 12 June. More AGM details can be found here.

Who’s in the chair? Former Kingfisher, Carlton Communications and Exel chief executive Gerry Murphy is hosting his first Tesco AGM, having been appointed in September.

How did the company do in the year to 24 February? The supermarket chain, which finished the period with a 27.6% market share, grew total sales excluding VAT and fuel by 7.4% to £61.5 billion. Adjusted operating profit rose 12.8% to £2.83 billion and statutory profit before tax by 159.5% to £2.3 billion. In line with a 50% of earnings policy, a final dividend of 8.25p a share is due to be paid on 28 June. This results in a total for the year of 12.10p, up 11%

How have shares performed? Up 12% to 279.7p in its last financial year (311.4p on Thursday).

How much is the boss paid? Ken Murphy’s base salary for 2024-25 has increased by 3% to £1.46 million. His total remuneration for 2023/24 amounted to £9.9 million, up from £4.4 million the year before and the highest sum received by Tesco’s chief executive in the past decade. The change in total remuneration primarily reflects his first vesting of long-term incentives shares, having joined the group in October 2020. The awards granted in 2021 vested at 85% of the maximum and are worth £4.9 million, delivered entirely in Tesco shares and subject to a further two-year holding period. The increase also reflects share price growth of £900,000 on the awards granted in 2021 at 223.6p. The annual bonus scheme contributed £3.4 million based on 95% of the maximum opportunity.

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How were the variable pay awards determined? Above target performances for group sales and adjusting operating profit meant the maximum 80% under the financial element of the annual bonus scheme. The result for the three-year period of the long-term incentive scheme was based on the maximum 50% outturn for cumulative free cash flow and 35% for adjusted earnings per share.

What’s the company say? The remuneration committee said the rewards for its executive directors are driven by strong performance. It adds that its remuneration policy reflects the complexities of managing a business of the size and scale of Tesco, and is comparable to policies offered by other FTSE 50 companies. The annual report also points out that Tesco invested a record £300 million in a pay rise for UK hourly-paid colleagues.

How did last year’s AGM go? The annual remuneration report was approved with 92.43% of votes in favour.

How’s the company doing on diversity? The board has 42% female representation, including in one of the senior roles. The company meets the Parker Review recommendations to have at least one director from an ethnically diverse background.

Whitbread

When: 2.30pm, Tuesday 18 June.

Where: Whitbread Court, Houghton Hall Business Park, Porz Avenue, Dunstable, Bedfordshire LU5 5XE.

How to participate:Whitbread (LSE:WTB) shareholders can either attend the AGM or listen remotely. The online element of the meeting has been scaled back after the company reported very low take-up of its live video stream service at two previous AGMs. Proxy voting instructions should be returned no later than 2.30pm, Friday 14 June and questions in advance submitted by 5pm, Monday 17 June. More AGM details can be found here.

Who’s in the chair? Former ITV and Royal Mail chief executive Adam Crozier was appointed in March 2018.

How did the company do in the year to 29 February? Revenues grew 13% to £2.96 billion, driven by a strong performance in the UK after Premier Inn total accommodation sales rose by 12% and revenues per available room by 10% to £65.56. Adjusted pre-tax profits rose by 36% to £561 million, with earnings per shares ahead by 27% to 206.9p. Total cash returned in the year amounted to £756 million, with the 5 July dividend payment of 62.9p a share resulting in a total 31% higher at 97p. From December, payments will only be by electronic means after a rise in the number of uncashed dividend cheques.

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How have shares performed? Up 7% to 3,303p (2,910p on Thursday).

How much is the boss paid? Dominic Paul’s base salary for 2024-25 has increased 4% to £936,000. His total remuneration for 2023/2024 amounted to £2.46 million, including £1.45 million of cash and shares from the annual bonus scheme. This was based on 94.96% of the maximum and was driven by the company’s above target performance relating to the metrics for profit and efficiency savings. There was no vesting of long-term incentive shares, with the former Domino’s Pizza chief executive’s first award not due to vest until next April. This year’s grant under the 2024 Restricted Share Plan is worth 125% of salary and is subject to three-year vesting as well as the performance underpins.

How did last year’s AGM go? The annual remuneration report was approved with 94% of votes in favour.

How’s the company doing on diversity? The gender split of the board is 38% female, narrowly short of the 40% target, and with all four senior positions held by men. The board has 23% ethnic representation.

Informa

When: 11am, Friday 21 June.

Where: 240 Blackfriars Road, London SE1 8BF.

How to participate: Proxy voting instructions should be returned no later than 11am, Wednesday 19 June. More AGM details can be found here.

Who’s in the chair? Former Rolls-Royce chief executive John Rishton joined the board as a non-executive director in September 2016 and became chair in June 2021.

How did the company do in 2023? The events, digital services and academic markets business delivered revenues of £3.19 billion, an increase of 41% on a year earlier and significantly ahead of market guidance at the start of the period. An increase in operating margin from 21.9% to 26.8% underpinned an 86% increase in adjusted earnings per share to 45.3p. A final dividend of 12.2p is due to be paid on 12 July, increasing the total for the year by 84% to 18p.

How have shares performed? Up 26% to 781.2p (841p on Thursday).

How much is the boss paid? Stephen A Carter’s base salary increased in April by 3% to £930,000. His total remuneration for 2023 amounted to £4.19 million, slightly higher than the previous year’s outturn and the most he has received during his past decade as chief executive. The figure included £2.38 million from the first year of vesting under the 2021-23 Equity Revitalisation Plan, which was introduced during the pandemic when the outlook was highly unpredictable. The shares were granted in 2021 at 545.4p and made through a restricted share plan. The remainder of the award is vesting in 2025 and 2026, subject to underpins. The 12 annual bonus objectives across three performance categories resulted in an award of 86.66% of the maximum opportunity, equivalent to £789,473 in cash and shares.

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How is remuneration policy changing? Shares worth 325% of salary have been granted to the chief executive as part of this year’s long-term incentive scheme, subject to three-year performance metrics. A new remuneration policy for 2025-27, which will be the subject of a vote at this year’s AGM, includes a proposal to increase future grants to 400%.

Informa (LSE:INF) said the change aligned policy to the median of its peer group. There are no changes to base salary policy, annual bonus approach or the performance based nature of long-term incentives. Remuneration committee chair Louise Smalley said: “Talent and leadership remain key strengths and differentiators for Informa, and they have been central to the group navigating the challenges of the Covid-19 pandemic and emerging a higher quality and higher growth business.”

How did last year’s AGM go? The annual remuneration report was approved with 94.54% of votes in favour. This compared with only 29% of votes in favour in 2022, when shareholders protested over changes in the pay framework in order to focus on cash and liquidity priorities during the pandemic.

How’s the company doing on diversity? The company has at least one board member from a minority ethnic background, in line with existing Parker Review guidelines. It also meets the requirement to have at least one senior board position held by a woman, although overall gender representation is slightly below the required 40% at 36.4%.