Tesco CEO Ken Murphy

Tesco CEO Ken Murphy saw his pay packet more than double last year to £9.9m as the supermarket’s executive team benefited from hitting performance targets and the vesting of share awards.

Tesco’s annual report, published today, showed Murphy’s overall pay package grew from £4.44m to £9.93m in the year to 24 February 2024.

His fixed pay declined from £1.71m to £1.6m, with the overall uplift driven by bonuses and vesting shares.

Murphy was awarded 95% of his maximum bonus, based on hitting targets for adjusted operating profit, group sales and 15% of the 20% based on individual performance.

That saw his annual bonus payout rise from £2.73m to £3.38m.

Meanwhile, the vesting of shares awarded under Tesco’s 2021 performance share plan was worth £4.91m to Murphy.

The shares, which are subject to a further two-year holding period, vested at 85% of their maximum level based on performance targets.

Tesco CFO Imran Nawaz saw his pay rise from £2.27m to £4.95m, having received 100% of his annual bonus of £1.71m and £2.33m under Tesco’s PSP plan.

Murphy and Nawaz will receive base salary increases of 3% and 5.4% from 26 May 2024, respectively.

Tesco said these are below the 9.1% increase provided to UK hourly-paid colleagues.

There will be no changes to the annual bonus and PSP measures or their weightings in 2024/25, as Tesco’s renumeration committee said it “continues to believe these are appropriate to incentivise the executive directors towards delivery of the strategy”.

The pay awards came after group sales for 2023/24 rose by 7.4% to £61.5bn and adjusted operating profits were up 12.8% to £2.83bn.

Writing in the annual report, chair Gerry Murphy said: “Tesco is well positioned to continue building on the successes of the past year as we head into 2024/25.

“While we expect cost of living pressures to remain a significant factor throughout the year, we will continue to focus our efforts on how we can best support all our stakeholders.

“Even as a relative newcomer to Tesco, I know I have joined a business that has the agility and flexibility to respond to any potential challenges, while continuing to listen to our customers and support our colleagues.”