By Neil Maidment and Paul Hoskins
LONDON (Reuters) - Tesco boss Philip Clarke has passed up an annual bonus of about 372,000 pounds ($588,000) after the retailer's poor performance in its main British market, heading off a potential outcry by investors increasingly critical of executive pay.
The chief executive was paid a basic salary of over 1 million pounds last year and was awarded share options worth 2.7 million pounds during his first year on the job, according to the company's annual report.
The world's third-biggest retailer, which issued a shock profit warning in January, also said on Tuesday its top 5,000 managers would receive a reduced annual bonus representing 16.9 percent of their maximum entitlement.
Executive directors will get 13.5 percent of the maximum.
Tesco (LSE:TSCO.L - News) shares have lost almost a quarter of their value this year after the supermarket group warned it needed to invest around 1 billion pounds in a bid to stem market share losses in Britain.
"I decided at the beginning of the year that I would decline my annual bonus for 2012," Clarke said in a statement emailed to Reuters on Tuesday.
"I wasn't satisfied with the performance in the UK and I won't take the bonus. I'm confident that we're tackling the right issues."
Clarke, a former Tesco shelf stacker, would have been entitled to a payout of about 372,000 pounds had he taken the 13.5 percent being paid to other executive directors.
His decision comes amidst a round of high profile shareholder revolts over executive pay at companies like Barclays (BARC.L), Inmarsat (ISA.L) and Prudential (PRU.L) in a phenomenon dubbed the "shareholder spring".
Investor resistance to big pay rises at underperforming firms has also led Aviva (AV.L) boss Andrew Moss, and Sly Bailey, head of newspaper group Trinity Mirror (TNI.L), to quit this month.
Richard Marwood, a fund manager at AXA Investment Managers, one of Tesco's top 20 investors, welcomed Clarke's decision.
"I think Clarke's move is laudable. It shows sensitivity to both the current investor mood on remuneration and the challenges facing Tesco," he said, adding this was his personal view rather than that of AXA.
Others, however, were concerned about the impact on morale among Tesco managers.
"(These are) troubling times for the company and the widespread cut in bonuses could threaten a senior management brain drain," said a UK fund manager who no longer holds shares in Tesco.
Tesco's annual report, published on Tuesday, shows Clarke's overall package for the 2011/2012 business year was 1.16 million pounds, including a salary of 1.09 million. That's almost half the 2.26 million pound package he enjoyed in 2010/2011.
His base salary will be little changed in 2012/13.
In March, Clarke jettisoned the head of Tesco's UK arm, assumed his duties and is now directly in the firing line if his plans fail to halt a slide in sales.
Last year, Tesco won over shareholders with a simpler and longer-term focused executive pay scheme following years of disputes over how it rewards management. In 2010, over 40 percent of its shareholders either opposed or abstained in a vote over management pay.
The annual report shows that in July last year - a few months after taking up the role of chief executive - Clarke was granted 752,331 share options then worth over 3 million pounds as part of a Long Term Performance Share Plan.
That almost doubled his overall holding under the scheme to 1.69 million shares. Under a separate Executive Incentive Plan, Clarke was awarded a further 155,518 shares worth over 640,000 pounds in May 2011.
In total the number of share options held by Clarke rose to 4.35 million last year from 3.5 million a year earlier. Based on a current share price of 310 pence, the increase in the size of his holding of options was worth almost 2.7 million pounds.
The number of options listed in the annual report is the full potential allowance and the amount finally awarded will depend on the group's performance.
At 1400 GMT, Tesco shares were broadly flat at 310.1 pence.
($1 = 0.6328 British pounds)
(Additional reporting by Anjuli Davies and Chris Vellacott; Editing by Mark Potter and David Cowell)
Source: finance.yahoo.com
Tesco offering double Clubcard points cash-in towards cost of new smartphones - Know Your Mobile
Tesco's Phone Shop is now running an offer which will allow you to cash-in your Clubcard Points and get double the value towards the cost of a new smartphone.
Regular shoppers at Tesco supermarkets who have a Clubcard can take part in the ‘Summer Clubcard Voucher Exchange' and buy a variety of handsets from the Tesco Phone Shop.
The deal means your Clubcard points are effectively doubled, cash-in £50 worth of Clubcard points and you can get £100 off an up-front payment for a brand new smartphone, for example.
Amongst the handsets available is the iPhone 4S, which can be had on contract with O2 with unlimited texts and 500MB of data for £21.50 per month and £100 worth of Clubcard points, saving £100 from the usual price.
Samsung's Galaxy S2 can be had for £13.50 per month with unlimited texts, again on and O2 tariff for £50 worth of Clubcard points.
BlackBerry fans can get hold of the Bold 9900 on O2 with unlimited texts, 200 minutes and 500MB of data for £21.50 per month and £50 worth of Clubcard points.
There are plenty of other handsets available through the deal as well. The offer is set to run for one month and ends on June 13 2012.
Source: www.knowyourmobile.com
Apple cements most valuable brand status as UK's giants slide - Marketing
The eight UK brands in last year's BrandZ top 100 lost 10% of their collective brand value, with Shell the only one to climb the table and Barclays dropping off the list.
By contrast, the top five global brands increased their brand value by 10%, with Apple's 19% increase to $183bn increasing its lead at the top.
Google dropped 3% to $107.9bn and lost second place to IBM, which benefitted from a 15% boost to $116bn.
McDonald's cemented its hold on fourth place, rising 15% to $95.2bn, while Microsoft stayed in fifth with a value of $76.7bn.
Vodafone, the most valuable UK brand, held on to 12th place despite a 1% fall in value to $43bn.
HSBC is the second most valuable UK brand, but its value decreased by 14% to $19.3bn and it dropped from 28th to 31st place.
It was overtaken by Facebook, which climbed from 35th to 19th after a 74% increase to $33.2bn.
Tesco fell from 31st to 36th place after its brand value declined 18% to $18bn, nearly meeting Shell coming the other way with a 17% increase to $17.8bn.
BP fell 17% to $10.4bn, Standard Chartered fell 16% to $10.1bn but O2 suffered most, plummeting 27% to $8.6bn.
There were brighter performances from smaller UK brands outside the top 100, including Dove, up 23% to $4.7bn and Burberry, up 21% to $4bn.
Tim Wragg, European CEO at Millward Brown, said: "The ubiquity of technology in our daily lives is more evident than ever this year as brand winners like Facebook, Apple and IBM grow from strength to strength and technology brands dominate the rankings."
The BrandZ study, now in its seventh year, combines measures of brand equity based on interviews with over 2 million consumers globally with data on companies’ financial and business performance.
Millward Brown EMEA managing director Nick Cooper's view on the results:
"We’ve seen UK brands decline over the last two years, but in fact since we began the rankings in 2006 UK brands have grown by 84% [in value] while the top 100 has grown by 66%. So even with the recent falls UK brands are as it were ahead of the curve.
"I think that the decline we have seen in recent years is a reflection of the UK economy and the European economy being difficult.
"Vodafone is very much a global business, they’ve managed to offset difficulties in Europe with opportunities in Africa and India. O2 is a brand that only exists in Europe – the fundamental problem for them is you’ve seen consumers trying to cut back a bit and regulators trying to address the issue of charging.
"The other thing is a lot of sectors where UK brands excel have also had their own difficulties. We’ve got a lot of top brands in banking and that is a very difficult sector indeed. We’ve also got oil, which has had its troubles, and retail, where lots of retailers are struggling.
"I don’t think it’s a long-term trend but I do think it’s a warning shot as to what the UK economy and UK brands need to do. But there’s lots of evidence to show the big brands like Vodafone, HSBC and Tesco are international if not global and increasingly globalising their operations. It’s a question of are they doing it fast enough and some would say they are and some would say they need to speed up.
"There are two UK brands I would pick out as riding the globalisation trend, though they are not in the top 100. One is Burberry, which is a significant success story. That is not only riding the wave of emerging markets, it’s also utilising technology – the internet and social media - to very good effect.
"The other one is Guinness. While it’s facing challenges in Europe it’s got a very large business in particular in Africa. It’s done extremely well there.
"Another thing that has struck me this year is we have an African brand for the first time [MTN at number 88]. It’s a reflection of how Africa has turned around. It’s one of the fastest growing regions of the world. Brands from all over the world are investing there. Maybe the Chinese got there first but now Western brands are doing the same and indeed some UK brands – not only Guinness but HSBC and Vodafone."
Follow Daniel Farey-Jones on Twitter @danfareyjones
Source: www.marketingmagazine.co.uk
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