London - A former chairman of Tesco, the world's No.3 retailer, said that restoring the store group's fortunes could take up to three years and appealed to investors to give Chief Executive Phil Clarke sufficient time.
Once one of the most consistent British companies in terms of earnings growth, Tesco, which trails France's Carrefour and US group Wal-Mart by annual sales, has had a particularly testing year.
In April the firm posted its first profit fall in two decades, wrote down the value of its global operations by $3.5 billion and confirmed plans to exit its loss-making US business Fresh & Easy.
“We're all very sad in this room to see the legacy that Terry Leahy (chief executive from 1997 to 2011) left,” Ian MacLaurin told shareholders on Friday at the firm's annual meeting.
“It is a very sad situation - your enormous writedowns, (and) the situation in America,” said MacLaurin, who chaired Tesco from 1985 to 1997.
MacLaurin said Tesco's board and shareholders had to counter “an age of short-termism” by taking a long-term view and giving Clarke - who took over from Leahy in March 2011 - and his team time to fix things.
“This job is going to be probably two or three years,” he said.
Tesco avoided a rebellion from investors over executive pay at the AGM.
Some 95.2 percent of shareholders who voted at the meeting backed the firm's executive pay report, even though advisory group Pensions Investment Research Consultants (Pirc) had called on investors to vote against it in protest at what it regarded as excessive payoffs to two departed executives.
Tesco paid Tim Mason, the former boss of Fresh & Easy, and Richard Brasher, ousted as the head of the UK business in March 2012, “liquidated damages” of 1.68 million pounds ($2.6 million) and 1.3 million pounds respectively in the 2012-13 year. - Reuters