Tesco is poised to publish the details of its new chief executive’s multimillion-pound golden hello.
When Dave Lewis, below, agreed to join Tesco in the summer, the retailer promised to compensate him for share bonuses amassed, but not paid, at Unilever during a near 28-year career at the consumer goods company. The details were not published to the stock exchange when his appointment was announced on 21 July.
They are now expected to be revealed after Tesco announces its half-year profits . The results have been delayed by the grocer’s discovery of a £250m accounting scandal.
Lewis’s contract, seen by the Guardian, also provides no detail about the value of the awards. Alongside the contract there is a letter outlining the terms of the job offer, dated 19 July. It is signed by the chairman, Sir Richard Broadbent, and reveals that Lewis was unable to provide Tesco with the required detail – notably the performance conditions – relating to his two Unilever share bonus schemes. The lack of information meant the company was “unable to calculate the forfeiture values”.
In the stock exchange announcement in July, the company said Lewis would be paid an annual salary of £1.25m and £525,000 in lieu of his annual bonus from Unilever. It also said he would be handed awards of Tesco shares equivalent in value to those he was leaving behind at Unilever.
The letter says the value of Unilever awards would be calculated on the average of the closing price on the four dealing days immediately after his joining date. This means Lewis will have suffered from the decline in the value of the retailer’s share price over the past two months. The restricted share awards will pay out on the same schedule as the Unilever awards would have.
The letter offering the job of finance director to Alan Stewart, who was poached from Marks and Spencer, is dated 9 July. It is signed by the chief executive at the time, Philip Clarke, who states: “We set ourselves the goal in this search to find a committed chief financial officer who would be a partner to me, would build an excellent relationship with investors and develop a world class finance function.” Clarke was fired within the fortnight.