Tesco chief executive Dave Lewis takes home £3m bonus

Tesco chief executive Dave Lewis

Tesco chief executive Dave Lewis has been paid a bonus of almost £3m for helping return the UK's biggest supermarket to profit.

Mr Lewis, who joined in August 2014 from Unilever, took home a total of £4.63m for 2015/16.

He did not receive a bonus in 2014/15 but was paid £3.3m in lieu of shares forfeited when he left his old role.

The base salary rose by £500,000 to £1.25m and his pension contribution rose £170,000 to £313,000.

The company posted a £162m profit for the year to 27 February - far better than the £6.3bn loss for the previous 12 months.

In a video released with the annual report, Mr Lewis said it had been "a good start in difficult circumstances" to the year.

Shares fall

However, Tesco shares fell sharply last month after Mr Lewis warned that profit improvement would slow in the first half of this year.

The stock has fallen by almost a third in the past 12 months and declined slightly on Friday to 155p.

Chief financial officer Alan Stewart, who joined in 2014 from Marks & Spencer, was awarded a bonus of £1.6m on top of his £750,000 salary to bring his total pay to almost £2.6m.

Both Mr Lewis and Mr Stewart were given 95.7% of the annual bonus available to them under Tesco's remuneration policy.

Half of Mr Lewis's bonus was due to be paid in cash, with the remainder in shares, but he has chosen to take half of the cash element as shares. Those shares are due to pay out in July 2018, or when the company resumes paying a dividend, whichever comes sooner.

Tesco expects both its chief executive and financial officer to hold shares in the company to the value of four and three times their base salary within five years of their appointments.

Mr Lewis owns shares worth £3.4m, while Mr Stewart has shares worth almost £1.9m.

John Allan, the chairman, said that it had been a "very challenging year" for Tesco but he was confident about its future, adding: "It is important that we get Tesco back to investment grade and paying dividends."