Tesco plc Annual Report and Financial Statements 2012

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Directors’ remuneration report Aligning pay with performance The following charts illustrate performance at Tesco against key performance indicators over the past five years. Underlying profit before tax – continuing operations £4,500m £4,000m £3,500m £3,000m £2,500m £2,000m £1,500m £1,000m £500m £0m 07/08 08/09 09/10 Return on capital employed (‘ROCE’) 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 07/08 08/09 09/10 10/11 10/11 11/12 11/12 Underlying diluted earnings per share – continuing operations 40p 35p 30p 25p 20p 15p 10p 5p 0p 07/08 08/09 09/10 Total Shareholder Return (‘TSR’) Value of £100 invested 23 February 2007 120 110 100 90 80 70 60 Tesco FTSE 100 Feb 07 Feb 08 Feb 09 10/11 Feb 10 11/12 Feb 11 Feb 12 The graph above shows a comparison between the Total Shareholder Return (‘TSR’) for the Company’s shares for the five-year period to 25 February 2012, and the TSR for the companies comprising the FTSE 100 over the same period. This index has been selected to provide an established and broad-based comparator group of retail and non-retail companies. For further details in relation to the numbers set out in the charts above please see the Five year record on page 152. 74 Tesco PLC Annual Report and Financial Statements 2012
OVERVIEW Aligning pay with performance The following charts illustrate the remuneration received by Executive Directors over the last five years. Richard Brasher £4.0m £3.5m £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m 07/08 Andrew Higginson £4.0m £3.5m £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m 07/08 Laurie McIlwee £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m 08/09 08/09 09/10 09/10 09/10 10/11 10/11 10/11 Laurie McIIwee was promoted to the Board during 2008/09 and therefore the first full year is shown above David Potts £4.0m £3.5m £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m 07/08 08/09 09/10 10/11 11/12 11/12 11/12 11/12 David Potts stepped down from the Board on 7 December 2011. The figures for 2011/12 are to 7 December 2011. Gains on share options (gain at vesting date) PSP (value on vesting date) Bonus – Deferred shares awarded STRATEGIC REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS Board of Directors Principal risks and uncertainties General information Corporate governance Directors’ remuneration report Bonus – Cash Allowance/benefits Salary Philip Clarke £4.0m £3.5m £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m £5.0m £4.5m £4.0m £3.5m £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m 07/08 Tim Mason £3.0m £2.5m £2.0m £1.5m £1.0m £0.5m £0m 07/08 Lucy Neville-Rolfe 07/08 08/09 08/09 08/09 09/10 09/10 09/10 10/11 10/11 10/11 11/12 11/12 11/12 Notes 1 Salary – The base salary paid in the year, as reported in the emoluments table for the relevant financial year. 2 Bonus (cash) – The cash bonus in respect of annual performance in that financial year, as reported in the emoluments table for the relevant financial year. 3 Bonus (deferred shares) – The value of deferred bonus shares on award, as reported in the emoluments table for the relevant financial year. These deferred shares vest three years after award and are not subject to further performance conditions. 4 PSP – The value of PSP awards that vested in respect of the three-year performance period ending in the relevant financial year. All awards valued based on the share price at the date of vesting, other than for 2011/12 award where the award is valued at the share price on 25 February 2012. 5 2007/08 and 2008/09 PSP – The PSP awards that vested in this year (other than to Lucy Neville-Rolfe and Laurie McIlwee) were subject to an additional one-year holding period and as such were not released until the following financial year. 6 PSP awards for Lucy Neville-Rolfe and Laurie McIlwee – The PSP awards granted to Lucy Neville-Rolfe prior to 2007 and to Laurie McIlwee prior to 2009 were before they joined the Board and therefore were granted under the senior management performance share plan. 7 Share options – The ‘gain’ in relation to share options that vested in respect of the performance period ending in the relevant financial year. Gain calculated based on the share price at the date of vesting less the exercise price, other than for 2011/12 award where the gain is calculated based on the share price on 25 February 2012. 8 Allowance�� to cover expatriate costs previously paid by the Company (see Table 1 – Directors’ emoluments on page 80 for further details). Tesco PLC Annual Report and Financial Statements 2012 75
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Annual Report and Financial Stateme
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Trading profit £529m 14% of Group
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OVERVIEW Chairman’s statement Cha
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OVERVIEW Chief Executive’s review
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OVERVIEW STRATEGIC REVIEW PERFORMAN
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OVERVIEW Strategy in action IN THIS
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OVERVIEW Quality and innovation STR
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OVERVIEW Clothing The UK clothing m
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OVERVIEW Click & Collect Click & Co
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OVERVIEW Smaller format stores Smal
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OVERVIEW Fresh & Easy: progress in
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OVERVIEW Savings and loans New prod
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Page 39 and 40: OVERVIEW US trading loss £(142)m
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OVERVIEW Note 21 Financial instrume
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OVERVIEW Note 22 Financial risk fac
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OVERVIEW Note 22 Financial risk fac
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OVERVIEW Note 24 Provisions continu
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OVERVIEW Note 25 Share-based paymen
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OVERVIEW Note 26 Post-employment be
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OVERVIEW Note 27 Called up share ca
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OVERVIEW Note 34 Leasing commitment
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OVERVIEW Note 2 Auditor remuneratio
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OVERVIEW Note 9 Borrowings STRATEGI
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OVERVIEW Note 11 Share-based paymen
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Financial calendar Financial year e
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