Tesco has tied CEO Ken Murphy’s 2026/27 annual bonus to the grocer’s market share performance, as it doubles down on its goal to take 30% of UK grocery sales.
Tesco’s Ken Murphy took a £10.8m total pay package last year, after being awarded over 90% of his possible maximum annual bonus.
For the current financial year, the CEO’s bonus will be tied to market share, alongside standard measures such as profit growth and carbon reduction, the company’s annual report revealed.
The retailer’s remuneration committee has also dropped food waste reduction as a measure, and reduced the combined weighting of other criteria of the performance share plan (PSP) to 15%, down from 16.7%.
Remuneration committee chair Melissa Bethell wrote in the report that “food waste [reduction] continues to be an important part of our strategy”, and the committee was confident Tesco would achieve its targeted 50% reduction by the completion of the 2025 PSP cycle.
Murphy’s 2025/26 package of £10.8m – up from £9.2m in 2025 – will largely be paid in equity, with £2.8m coming from share price appreciation alone. Tesco’s share price has risen 23.9% over the past year.
Tesco’s annual report, published on Thursday afternoon, showed Murphy’s base salary will now increase by 3% to £1.54m for the 2026/27 financial year.
Chief financial officer Imran Nawaz received an 8.2% pay rise, and will now take home £900,000 per year before tax. Nawaz’ bonus for the year amounted to £5.7m, up from £5.1m in 2025.
Overall, Tesco executive directors received a 4.9% average pay rise, just below the 5.1% increase for UK hourly-paid colleagues.
The pay awards came after Tesco exceeded its own forecasts to post 4.6% revenue growth, with UK like-for-like sales up 4.2%. Sales excluding fuel rose to £66.6bn, adjusted to a 52-week basis to 22 February 2026.
The retailer’s operating profit nudged up to £3.15bn, outperforming its own estimates of £2.9bn-£3.1bn after a strong Christmas trading period.
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