Tesco chief executive Ken Murphy has seen his total annual remuneration package climb to £10.8 million, marking an increase of £1 million from the previous year. The supermarket giant’s latest annual report disclosed that Mr Murphy secured a £3.4 million annual bonus and £5.7 million in share awards for the 2025-26 financial year.
This significant pay rise follows a period of strong performance for the company, which reported earnings of £3.15 billion for the year ending February 28, up from £3.13 billion. Furthermore, Tesco achieved its highest market share in over a decade, with sales, excluding VAT and fuel, growing by 4.6% to £66.6 billion. Mr Murphy's package for 2024-25 stood at £9.8 million.
The report also showed the chief executive’s basic annual salary will increase by another 3% to £1.54 million on May 24, while chief financial officer Imran Nawaz will receive an 8.2% hike to £900,000.
Melissa Bethell, chairwoman of the Tesco board remuneration committee, said in the report: “The remuneration for our executive directors is closely tied to the strong performance of the business. Our policy is comparable to other FTSE 50 companies and reflects the complexities of managing a large-scale operation. A significant portion of the total package has been achieved due to Ken Murphy and Imran Nawaz meeting or exceeding challenging targets in a competitive sector, creating value for all stakeholders.”
The report showed Mr Murphy picked up his long-term share award bonus despite the group not meeting its target for reducing food waste by 50%, only achieving a 24% drop in 2025-26. The firm is removing the food waste target from the three-year long-term performance share plan (PSP) bonus scheme going forwards.
Tesco said: “While food waste continues to be an important part of our strategy, we feel confident that we will achieve our targeted 50% reduction (vs a 2017 baseline) by the completion of the 2025 performance share plan cycle. This gives us the opportunity to evolve the 2026 PSP scheme to align to future strategic priorities, which will run to 2029.”
The group recently announced a 5.1% hike for workers across the business, which it said was an investment of more than £200 million. This followed a £65 million bonus award shared between staff across stores, warehouses and customer engagement centres after increasing sales and profits in the last financial year.
The pay details come days after Tesco received a setback in a lengthy legal battle over an equal pay claim, when the Court of Appeal threw out the chain’s challenge to the way an employment tribunal had been assessing the value of jobs carried out by its customer assistants. It is among a raft of unequal pay claims brought against some of the biggest retailers in the UK. A separate case against fellow supermarket Morrisons opened earlier this month.
