Tesco to Face Shareholders
By Laura Elliott.
Tesco, the UK’s largest retailer, will soon have to attempt to avoid becoming the latest victim of the ‘shareholder spring’, when it is forced to meet investors at its annual meeting. The meeting comes in the midst of growing criticism concerning the pay rates io the company’s executives and the performance of the US branch Fresh n’ Easy.
It has been predicted that Tesco’s executives may also face pressure from shareholders at the Cardiff meeting this Friday, primarily over their plans to revive the grocer’s core business. The core business in the UK accounts for around one in ten pounds spent in British stores, as well as an estimated 70% of annual trading profit.
Although once upon a time Tesco was considered to be one of the most consistent British companies in terms of earnings growth, the retailer shocked investors in January this year by releasing its first profit warning in more than twenty years. At the time, the chain claimed that it needed to invest heavily in order to stem a steady decline in its UK market.
The Pensions Investment Research Consultants (Pirc) have spoken out, saying that investors should vote against the store’s group pay report. The pension fund consultant claims that there was still the potential for “wholly excessive” payments.
The retailer may hope that the chief executive, Philip Clarke’s, move last month in not taking his £372,000 bonus might have defused any potential rebellion. However, the Tesco boss still earned a staggering £1.16 million in 2011-12. It is predicted that the investors may make much of this in coming discussions.
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