New York City A substantial bloc of Tesco PLC shareholders, urged on by U.S. union activists, rebelled against the pay of the retail company's senior executive in the United States at an annual meeting on Friday. Criticism was directed at the $6.55 million compensation package for Tim Mason, president and chief executive of Tesco's Fresh & Easy Neighborhood Market division in the United States.
Thirty-eight percent of shareholders voted against Tesco's remuneration report, which sets out pay for senior executives and directors of the chain.
â€śThe extraordinary opposition vote reflects investor outrage over the excessive pay awarded to Tim Mason, Tesco's second highest paid executive, despite the dismal performance of the U.S. Fresh and Easy business he oversees," said Michael Garland, director of value strategies for the CtW Investment Group, which had urged shareholders to oppose the remuneration report.
CtW Investment Group, which works with pension funds sponsored by unions affiliated with Change to Win, a coalition of U.S. unions representing nearly six million members, had called for a vote against the remuneration report. Fresh & Easy has yet to turn a profit since being launched in 2007.
"Tesco shareholders are troubled by the Tesco board's apparent willingness to modify performance targets to award pay for failure," CtW's executive director William Patterson said last month.
As the rebels couldn't muster a majority, the pay report was approved.
Tesco chairman David Reid said it was important to provide strong incentives to develop Fresh & Easy.
"In almost every country, you incur losses in the first three years. This is nothing unusual," said Reid, who asserted that losses had peaked, in an Associated Press report.