Tesco keeps clawback of Clarke’s pay-off in sight
TESCO said yesterday that it could still claw back a £1.5m pay-off made to former chief executive Philip Clarke if new evidence of misconduct during his time at the retailer came to light.
Tesco was forced to suspend its own internal probe into practices that led the company overstating profits by £263m when the Serious Fraud Office launched an investigation last year.
The company was contractually obliged to make a termination payment of £1.2m to Clarke and £970,880 to Laurie McIlwee. However a spokesperson said yesterday that it will continue its investigation once the SFO finishes its own and reserved the right to claw back their pay-offs.
“Should it be determined in the future that there was gross misconduct the company will seek recovery of the termination payment,” the UK’s largest supermarket said in its annual report published yesterday.
It has also introduced similar claw-back provision for current chief executive Dave Lewis and finance director Alan Stewart in the event that results are “materially misstated or the participant has contributed to serious reputational damage.”
The report for the year to 28 February showed Lewis has received £4.1m of pay since he was parachuted in six months ago from consumer goods giant Unilever to help turn the ailing business around.
This includes a salary of £570,000, £97,000 of benefits and a pension of £143,000. He also received £3.32m in place of incentive awards he forfeited on leaving Unilever.
Lewis joined Tesco in September, a month earlier than planned and three days after the company issued its third profit warning in eight months. The supermarket last month reported the worst results in its history with a record statutory pre-tax loss of £6.4bn.
Alan Stewart, who took over as finance chief in December, received a pay package of £2.3m, including a basic salary of £297,000 and £1.9m in lieu of incentive award he would have been granted at his previous employer Marks & Spencer.