Tesco boss Ken Murphy defends his mammoth £4.7m pay packet despite warning shoppers face ‘unprecedented increases in the cost of living’
Ken Murphy: ‘well remunerated’
Tesco boss Ken Murphy defended his mammoth £4.7m pay packet yesterday despite warning shoppers face ‘unprecedented increases in the cost of living’.
Murphy is paid 224 times as much as an average worker at the UK’s biggest grocer.
On his pay he said ‘absolutely I am well remunerated,’ adding that most of it is based on Tesco’s performance.
But Luke Hildyard at thinktank the High Pay Centre said nobody works 224 times harder or is 224 times wiser than anybody else.
He said: ‘It really shows how totally dysfunctional pay practices at big companies have become. Pocketing £5m totally undermines the message on inflation.
‘Boards need to reflect on how their grossly unfair chief executive pay awards compromise their ability to be taken seriously as partners in combating the huge range of economic problems facing the country.’
The row came ahead of its annual meeting, where almost a tenth of Tesco shareholders opposed Murphy’s pay.
It also posted disappointing results. UK sales in the three months to May 28 slipped to £9.9billion, a 1.5 per cent drop from the same period last year.
The grocer, which accounts for 27.4 per cent of the UK market, said it was an ‘incredibly challenging’ trading environment, adding it was seeing ‘some early indications of changing customer behaviour as a result of inflation’.
Customers are buying less and switching to cheaper products to cut the cost of a weekly shop. Pasta, bread, beans and other staples are the products the grocer is seeing people trade down on, to own-brand or cheaper ranges.
In a bid to support shoppers, it has boosted the availability of its ‘Aldi price match’ and ‘low everyday prices’ ranges.
So far that has worked and Tesco has bucked the trend of families flocking to the German discounters Aldi and Lidl to save cash.
Murphy said: ‘Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible.’
Tesco shares rose 0.8 per cent, or 2p, to 251.7p. It said it expects profits for the year to be between £2.4billion and £2.6billion.