Tesco wins investor backing for pay plan
LONDON, July 2 (Reuters) - Tesco, the world's third-largest retailer, won support for its management pay plan at its annual shareholder meeting on Friday, despite criticism from a handful of investor lobby groups.
The British supermarket group said its remuneration report was endorsed by 62.36 percent in a shareholder vote, with 37.64 percent against.
Corporate governance advisory firm Pirc, which works with investors with assets of over 1.5 trillion pounds ($2.2 trillion), and RiskMetrics, whose Research Recommendations and Electronic Voting service provides voting advice to UK pension funds, had both urged shareholders to vote against the report.
Pirc said Tesco Chief Executive Terry Leahy, whose total remuneration package was 5.2 million pounds ($7.7 million) last financial year, was the second-highest paid director in the FTSE-100 consumer services sector and Tesco's average directors' pay was in the upper quartile of the comparative group.
CtW Investment Group, a U.S. firm that works with pension funds that have stakes in Tesco, had also voiced opposition and had been particularly critical of the pay package for Tim Mason, the head of Tesco's loss-making U.S. business.
Mason received a total remuneration package of 4.3 million pounds in 2009-10, up from 3.8 million the year before.
Chairman David Reid also defended the firm's accounting policies at the meeting, after a report by Citigroup analysts argued that its 2009-10 profits would have been about 800 million pounds ($1.21 billion) lower if it had used the same policies as its main rivals.
Reid said there were "serious inaccuracies" in the analyst note, and he was "absolutely satisfied that our accounting policies are appropriate".
Reid, who did not explain what the inaccuracies were, said his finance director Laurie McIlwee was taking up Tesco's concerns about the note with its authors.
Shares in Tesco, which runs over 4,800 stores across 14 markets, were up 0.95 percent at 381.15 pence at 1152 GMT, in line with the London market.