Statement on former directors’ remuneration
Tesco confirms that it has agreed to pay the liquidated damages contractually due to Philip Clarke (£1,217,000) and Laurie McIlwee (£970,880) under their separation agreements as former directors of the Company (the “Payments”).
At the time of the Company’s last interim results, it was noted that the Payments were suspended given the investigation into the issues regarding the accounting for commercial income.
The Company is contractually committed to make the relevant Payment to each former director unless it can legally establish a case of gross misconduct against him. The Company has taken legal advice and has concluded that it does not have the basis for continuing to withhold the Payments. Accordingly, the Board considers that defending costly claims for the Payments would not be in the Company’s best interests.
The SFO continues to investigate the commercial income issue. If new information were to come to light which would change this assessment, the Company will pursue recovery of the Payments and damages and has fully reserved all its legal rights in this respect.