The board of Tesco was asked to justify Ken Murphy’s near £10 million pay package when it faced shareholders at its annual meeting on Friday.
The chair of Tesco’s board Gerry Murphy said in the meeting that Murphy’s pay package was “competitive” within the global market.
Gerry Murphy said, “We do recruit from time to time at very senior levels from the global market and frankly we just have to be competitive with that market.”
Oppositions
Investors of Britain’s largest supermarket chain have become more vocal in their opposition to boardroom pay deals they deem excessive in the cost of living crisis.
Last month, Tesco’s annual report showed that Ken Murphy was paid £9.93 million in the year to 24 February 2024.
This was an increase of £4.44 million from the previous year.
Ken Murphy’s pay was 430 times more than the average Tesco employee, according to responsible investment group ShareAction.
The organisation plans to ask the Tesco board how they can justify Ken Murphy’s pay when cleaners and security staff are paid less than the real Living Wage.
Real Living Wage
Charity the Living Wage Foundation established the real Living Wage, which is a calculation of the minimum hourly rate necessary for workers to afford housing, food and other basic needs.
The real Living Wage is currently £13.15 per hour in London and £12 per hour in the rest of the UK.
This rate is higher than Britain’s government-mandated minimum wage, the National Living Wage, of £11.44 per hour.
ShareAction’s Good Work investor coalition represents $6.6 trillion in assets under management.
Members include LGIM, HSBC Asset Management, Aviva, NEST and Scottish Widows.
It is urging all of Britain’s major supermarkets to accredit as a Living Wage employer, guaranteeing all staff, including third-party contractors, the real Living Wage on an ongoing basis.
Last month, Tesco said that a large proportion of Murphy’s total package reflected him ‘achieving stretching targets in a highly competitive sector and working to create value for customers, colleagues, suppliers, communities and shareholders.’
It added that it ‘remains committed to a competitive and fair reward package for all colleagues.’
In April, Tesco reported an 11% rise in 2023/24 profit.
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