Proxy Report - 15/06/2018
Merger with Booker
The merger with Booker has been completed. Accordingly, Charles Wilson, Booker's Chief Executive Officer and Stewart Gilliland, Booker's Chairman, joined the Combined Group's Board.
Litigation
The UK Serious Fraud Office has announced its intention to seek a retrial of three former Company executives for allegations of fraud and false accounting amounting to a £246 scandal.
In addition, on 10 April 2017, the Company announced that its subsidiary, Tesco Stores Ltd, had obtained Court approval and entered into a Deferred Prosecution Agreement (DPA) with the UK Serious Fraud Office (SFO) regarding historic accounting practices. Finally, the Company is currently facing a gender pay lawsuit which could cost them up to £4bn, which would make it the largest lawsuit of its kind in Britain. Please see the attached report for further details.
Item 2: Advisory vote on the Remuneration Report The maximum bonus exceeds ECGS guidelines as does actual incentive pay for the year. The quantum is excessive.
Item 3: Approve the Remuneration Policy While the introduction of a 2-year holding period is welcome as well as the decrease of cash in lieu of pension for new joiners, we do not welcome the change in performance metrics, especially to move away from the relative TSR metric. We consider that this change will impair the alignment between executive remuneration and shareholder value creation in the future. Besides, the changes proposed to the Remuneration Policy do not address concerns over the structure of remuneration. This includes the maximum bonus and maximum potential incentive pay, which both exceed ECGS guidelines, as well as the possibility to pay excessive benefits, which raised shareholder concerns in the
previous year
Items 18 and 19: Re-appoint Deloitte LLP as auditors and authorise the Board to determine the auditors's remuneration Non-audit fees are considered excessive and may undermine auditor independence.
Tesco is a retailer. Co. and its subsidiaries are engaged in retailing and associated activities in the U.K. and Republic of Ireland; and Czech Republic, Hungary, Poland, Slovakia, Malaysia, and Thailand. Co. provides retail banking and insurance services through Tesco Bank in the U.K. Co. sells and services of motor and home insurance policies underwritten by Tesco Underwriting Limited, or in a minority of cases by a third-party underwriter. As of Feb 25 2017, Co. had a total of 6,809 stores worldwide, including 256 franchised stores.
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