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Tesco execs on the rack at AGM
Guardian Unlimited
Richard Wray
Friday June 29, 2007
Nearly one-in-six Tesco shareholders voted against a controversial pay deal that could hand chief executive Sir Terry Leahy an eight-figure bonus.
The company also faced stinging criticism today from some shareholders over the conditions suffered by workers at some of its overseas suppliers.
At its annual general meeting in London today, 17.7% of shareholders failed to back a resolution approving the new pay deal, under which bonuses are linked to the success of Tesco's US operations.
Sir Terry Leahy could receive as much as £11m through the plan.
David Reid, chairman of Tesco, said it would push on with the plan despite the opposition. He claimed that shareholders who voted against the plan had been worried about setting a precedent for other companies.
The wider remuneration report was not backed by 8.75% of shareholders.
Tesco shareholders were also asked to vote on a resolution demanding that it takes measures to guarantee better conditions that the people who work for its overseas suppliers.
It called on the supermarket chain to ensure they "are guaranteed decent working conditions, a living wage, job security, freedom of association and of collective bargaining including ... the right to join a trade union of their choice".
It was brought by Ben Birnberg, a retired solicitor and company secretary at War on Want. Tesco initially tried to block the resolution but Mr Birnberg attracted enough shareholders to back his plan.
Attendees at today's meeting included Gertruida Baartman, who earns around 30p an hour picking fruit for Tesco in South Africa.
In the event, 19.4% of shareholders either voted in favour of the resolution or witheld their votes. Several urged the company to pay more attention to the plight of those at the bottom of its supply chain.
One shareholder said she wanted to stop "being ashamed of being a Tesco shareholder".
"I want to be proud, and I'm sure you want to be to," she told the board.
A second shareholder said: "Sir, this is a small world. Look how much we pay you guys. Give something back."
A third shareholder suggested that, in order to fully understand the plight of people working for Tesco's suppliers in developing countries the chairman should go and live in Bangladesh and work in the garment industry for six months, before doing the same in a South African fruit-picking farm.
"If everything's fine, you'll have a great time and come back with a tan. If not, you'll be thinner and a lot more understanding of the plight of these poor people," he said.
3 comentario:
So, what is a proper wage for a fruit picker in SA? What was Gertruida Baartman making before his 30p/hr job as a fruitpicker? I bet it was less.
I'm not saying Tesco is in the right, but that article is pretty one sided. In the book Naked Economics, the author writes about legislation in the US that basically shut down a "child sweatship" in South America. The result: a dramitic increase in child prostitution because there were no more factory jobs.
So, let's say you stop shopping at Tesco, as does everyone else who opposes their business practices. What becomes of Gertruida Baartman then? I imagine that your boycott would hurt the very people you want to support.
I agree with Chris. How much do you think would be a decent wage for a fruit picker then? Should they be paid according to USA standards? Or to their own local standards? And how much would you have to pay for a fruit if fruit pickers were to earn more than 30p/hour? How much are you willing to pay?
What happens if Tesco pays the fruit pickers more? What will that achieve? Higher costs? Will people start to complain when they have to pay 10 pounds for a fruit? And boycott Tesco because of high prices?
Poor Tesco. They're doomed if they do, they're doomed if they don't. You've got to pity all these large multi nationals that take the shit from people with "good intentions".
I agree with both of your comments. It would be difficult to seek comparisons based on two countries with very different living standards and market forces. We can argue that the low wage may be unethical but are we looking at it through the correct perspective? It could be that this wage is sufficient to support Gertrude's family,I am not certain about this though.
I think the greater issue in this topic is the great disparity between the wage of the CEO and the lowest employee. But does that disparity indicate a lack of ethics? I think not. Many CEOs have been faulted for fantastic wages and bonuses but is it their fault that they are being awarded such huge amounts of money? It's all about market forces and compensating risk.
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