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Tesco boss Dave Lewis buys first shares more than a year after joining Tesco boss Dave Lewis buys first shares more than a year after joining
(about 2 hours later)
Dave Lewis has bought his first shares in Tesco more than a year after becoming chief executive of the ailing supermarket chain.Dave Lewis has bought his first shares in Tesco more than a year after becoming chief executive of the ailing supermarket chain.
A group of Tesco directors have bought almost £450,000 of shares in the retailer, with Lewis, who joined on October 1 2014, snapping up £200,000 worth.A group of Tesco directors have bought almost £450,000 of shares in the retailer, with Lewis, who joined on October 1 2014, snapping up £200,000 worth.
The Guardian reported last month that the entire board of Tesco had invested less than £350,000 in the company and that corporate governance pressure groups had criticised the lack of share purchases by Lewis and Alan Stewart, the finance director.The Guardian reported last month that the entire board of Tesco had invested less than £350,000 in the company and that corporate governance pressure groups had criticised the lack of share purchases by Lewis and Alan Stewart, the finance director.
The share purchases come a day after Lewis said the Tesco board had barred him from buying shares because he possessed too much inside information about the progress of asset sales and the Serious Fraud Office investigation into an accounting scandal at the company.The share purchases come a day after Lewis said the Tesco board had barred him from buying shares because he possessed too much inside information about the progress of asset sales and the Serious Fraud Office investigation into an accounting scandal at the company.
Related: Tesco profits tumble by more than halfRelated: Tesco profits tumble by more than half
“We as a board took a decision that while those things were ongoing, we would exclude ourselves from being able to trade Tesco shares,” Lewis said as Tesco reported half-year results showing a 55% drop in operating profits before one-off items.“We as a board took a decision that while those things were ongoing, we would exclude ourselves from being able to trade Tesco shares,” Lewis said as Tesco reported half-year results showing a 55% drop in operating profits before one-off items.
“We operate under that restriction to this day because we think that is the right corporate governance to have when you are going through this sort of turnaround and have these sorts of issues.”“We operate under that restriction to this day because we think that is the right corporate governance to have when you are going through this sort of turnaround and have these sorts of issues.”
However, in what appears an orchestrated collection of trades by the board, Lewis bought £200,000 of shares while Stewart acquired £101,200, and John Allan, the chairman, spent £100,000. Richard Cousins, the senior independent director, bought £35,540 of shares, and non-executive director Mikael Ohlsson bought £10,500. However, in what appeared an orchestrated collection of trades by the board, Lewis bought £200,000 of shares while Stewart acquired £101,200, and John Allan, the chairman, spent £100,000. Richard Cousins, the senior independent director, bought £35,540 of shares, and non-executive director Mikael Ohlsson bought £10,500.
A Tesco spokesman said the share dealings “followed the publication of our interim results and the conclusion of our portfolio review”.A Tesco spokesman said the share dealings “followed the publication of our interim results and the conclusion of our portfolio review”.
Lewis confirmed in Tesco’s interim results that the company does not plan to sell more assets after offloading its South Korean chain, Homeplus, for £4bn.Lewis confirmed in Tesco’s interim results that the company does not plan to sell more assets after offloading its South Korean chain, Homeplus, for £4bn.
Despite the share purchases, the investment by Tesco’s board pales in comparison with its rivals. David Potts, the boss of Morrisons, spent more than £1m buying 508,000 shares during his first week in charge in March.Despite the share purchases, the investment by Tesco’s board pales in comparison with its rivals. David Potts, the boss of Morrisons, spent more than £1m buying 508,000 shares during his first week in charge in March.
Tesco’s official policy is that Lewis must hold four times his base salary of £1.25m in shares while Stewart must hold three times his £750,000 salary.Tesco’s official policy is that Lewis must hold four times his base salary of £1.25m in shares while Stewart must hold three times his £750,000 salary.
However, the directors have five years from joining Tesco to reach this target and the company includes shares awarded for free to Lewis and Stewart as part of their remuneration package. However, the directors have five years from joining Tesco to reach this target and the company includes shares given to Lewis and Stewart as part of their remuneration package.
Tesco shares rose 2% to 200.95p on Thursday. However, they have fallen by almost a fifth since the day Lewis began as chief executive.Tesco shares rose 2% to 200.95p on Thursday. However, they have fallen by almost a fifth since the day Lewis began as chief executive.