Our approach to pay and reward

Our approach to pay and reward

Last updated 12/02/2021

Tesco’s most important asset is its people. Business success depends on the performance and contribution of each individual colleague but outstanding performance comes from teamwork. Therefore, our approach to reward throughout Tesco is guided by a framework of common objectives and principles which are outlined below.

Reward objectives

Attract - Enable Tesco to recruit the right people

Motivate - Incentivise colleagues to deliver our business goals together

Recognise - Acknowledge individual contribution and performance

Align - Create shareholder value by focussing colleagues on making what matters better

Retain - Foster loyalty and pride in Tesco so that colleagues want to stay with us

Reward principles


  • We assess competitiveness on a total reward basis including financial and non-financial rewards
  • Reward reflects an individual's role, experience, performance and contribution
  • Reward is set with reference to external market practice and internal relativity


  • Reward is simple, clear, and easy to understand
  • We avoid unnecessary complexity
  • Reward is delivered accurately


  • Policies are transparent, and applied consistently and equitably
  • Reward decisions are trusted and properly governed
  • Reward is legal and compliant


  • Reward is aligned to the business strategy, reflects our performance and is affordable
  • Our reward framework is flexible to meet the changing needs of the business
  • We reward in a responsible way

Reward arrangements throughout the Group

Tesco is one of the largest public company employers in the world. Our colleagues come from diverse backgrounds reflecting the countries we operate in and the range of skills we need to
run our various businesses (from stores to banking to telecoms).

Reward packages therefore differ taking into account appropriate factors but they are all built around the common reward objectives and principles outlined above.

  • Annual bonus – Many colleagues are eligible for annual bonuses in a structure consistent with the Executive Directors’ annual bonus, with a focus on sales, profit and individual performance.
  • Share incentives – Our senior managers across the Group participate in the Performance Share Plan based on similar performance conditions to those for the Executive Directors’ PSP and all of our management team receive some of their bonus in Tesco shares, deferred for a period of two or three years.
  • Colleagues as shareholders–It is an important part of the Tesco Values that all colleagues, not just management, have the opportunity to become Tesco shareholders. More than 130,000 colleagues participate in our all-employee schemes, holding shares in our Share Incentive Plan and options over shares in our Save As You Earn scheme.”