Supermarket boss salary doubles during cost-of-living crisis
The CEO of Tesco, Ken Murphy, has received a huge pay rise. From £4.44m to £9.93m to be precise. He received this enormous sum as a mixture of salary (4.7 million!) and bonuses in the year to February 2024.
This year Murphy will receive a 3% rise on his basic salary which Tesco says is below the raise for hourly paid staff. However, that’s without taking the bonuses into account so does not provide the full picture, given that those staff can’t get access to bonuses.
Tesco defends the rise
“Tesco remains committed to a competitive and fair reward package for all colleagues,” said Alison Platt, a non-executive director at Tesco and the chair of the company’s remuneration committee.
She believes that the salary “recognises the strong performance of the business.”, adding “A large proportion of the total package has been achieved because the business met stretching targets in a highly competitive sector…”.
Targets?
But just what were those targets? Make as much money for the directors as possible at whatever cost to customers? Tesco has indeed enjoyed a strong financial performance. Its operating profit was £2.83bn for the year, up 13% from the year prior, as a result of sales which rose by 4.4% to £68.2bn in the year to 24 February 2024.
Of course supermarkets should make a profit. That isn’t the issue. But is it ethical to make bigger than ever profits during a cost of living crisis?
Should the targets set have been more challenging? Perhaps something along the lines of – Reach £x profit whilst keeping y% of products below the cost of the same and similar products (own brands) at rival supermarkets.
Multiplying the injustice
Murphy is paid more than 430 times the average pay at Tesco. This is up from a multiple of 197 in the previous year. It’s horrendous.
The Guardian reports in its article Tesco CEO’s near £10m pay a ‘slap in the face’ for struggling workers, union says:
Sharon Graham, the general secretary of the Unite union, said: “Ken Murphy’s £5m wage increase is a slap in the face to the millions of struggling workers and their families who paid for it through higher food bills. The fact is, Tesco has taken advantage of the cost of living crisis to rake in obscene profits, and it is far from the only one.”
Luke Hildyard, the executive director of the High Pay Centre think tank, said:
You couldn’t really get a better indicator of how the UK economy serves the interests of the super-rich at the expense of everybody else than this – a multimillionaire chief executive trousering another £10m while their customers endure major price rises and their employees have to get by on less than a quarter of a per cent of what the CEO takes home.”
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Tesco over the last 10 years
Murphy took over as Tesco CEO in October 2020, succeeding Dave Lewis, who left after 6 years at the helm.
Lewis had turned the company round. He listened to customers and gave them what they wanted.
When he started at Tesco I sent him a The Complaining Cow milk bottle of sweets and invited him to look at my blog posts criticising Tesco and my court case. Lewis invited me to a meeting and from there another – The Complaining Cow v Tesco CEO & Executive Team
The highlight of my interaction with Tesco during his leadership was The Complaining Cow interviews Tesco bosses Matt Davies and Dave Lewis, the first and only interview with both the UK and Group CEOs together. This was based wholly on questions from customers.
Has Tesco stopped listening?
The Complaining Cow’s history with Tesco list of all the posts/activities over the last 13 years regarding Tesco.
I had six years of a good working relationship with Tesco. When Lewis left this connection should have continued. If Tesco had wanted to show that it was listening to customers, then the PR team and Murphy would not be ignoring requests for interviews.
However, despite numerous emails to both Murphy and the PR team over a couple of years, all my requests have been ignored. To stop communicating is rude and reflects badly on the company, as it appears to show that this is what they think of their customers. One can only assume that they have been instructed not to engage in any shape or form with anyone who has the voice of the customer?!
If you are from Tesco’s marketing or PR teams and would like to reestablish a dialogue, please contact me!
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The Complaining Cow’s history with Tesco list of all the posts/activities over the last 13 years regarding Tesco.
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