Tesco Plc said new Chief Executive Officer Dave Lewis will receive £3.8 million ($6.1 million) of shares over two years to compensate the forfeit of awards he would have been due from his former employer.
Lewis, who joined on 1 September from Unilever, has been granted nil-cost options over 1.66 million Tesco shares, which he will get in three tranches starting in February 2015, the Cheshunt, England-based company said today. A £1.7 million option grant has been made to Chief Financial Officer Alan Stewart after he joined from Marks & Spencer Group Plc on 22 September.
Lewis and Stewart are seeking to restore stability to the largest British grocer amid an accounting crisis that has led to the suspension of eight senior managers, and a slump in sales and market share. Their option awards highlight a plunge in the shares, with a 20 percent difference in the price used to calculate the number of shares awarded to the two men even though Stewart started only 22 days later.
Lewis’s grant of options is based on an average price of 230.4 pence in the four days after he joined the grocer, Tesco said. Stewart’s is based on a price of 191.7 pence, it said.
Tesco fell 0.6 per cent to 167.70 pence at 1:24 pm in London. The stock has dropped 50 percent this year, making Tesco the worst performer in the UK benchmark FTSE100 Index.
“The remuneration committee believes that these awards fairly reflect the awards the directors forfeited on leaving their previous employment in terms of value and timescale of vesting,” Tesco said in a statement.
Stewart will get an additional award in about July 2015 to cover the portion of Marks & Spencer’s bonus that he forfeited.
Bloomberg News, edited by ESM
