A Tesco supermarket in west London. Picture: Toby Melville

London - Campaigners hijacked Tesco's annual meeting with calls to pay its supermarket workers the living wage, amid a shareholder revolt over chief executive Dave Lewis's multimillion-pound pay deal.

Tesco, which has 320 000 staff in the UK, pays store employees a basic £7.02 an hour - below the current £7.85 an hour recommended by the Living Wage Foundation, rising to £9.15 in London. Shareholders and the campaigning group Citizens UK urged the grocery giant to raise its pay - with one even calling for a customer boycott if Tesco failed to comply.

The issue was thrown into sharp relief by a revolt over Lewis's pay package, which the pension advisory group Pirc labelled “excessive” before the meeting. Lewis can earn bonuses of more than five times his £1.25m basic salary, but shareholders have had to swallow an axed dividend and tumbling share price since the company was sucked into a £263m accounting scandal.

Tesco also reported the biggest loss in its history in April - £6.4bn - after slashing the value of its store portfolio as discounters eat into profits. One shareholder said it had gone from the “Rolls-Royce of retail to the Ryanair of retail - except that people still want to fly Ryanair”.

The results of the vote showed 22 percent of shares failing to support the chief executive's pay. Investor Michael Mason-Mahon said Lewis was paid “£3,424 a day but a person on the shop floor get less than £46”. He added: “Will this board commit today to paying a living wage for this company? If not, I highly recommend a customer boycott.”

Mason-Mahon continued: “Our society can no longer accept the greed of executives and directors. Our society needs men and women of integrity, not men and women who hope to fill their pockets at the expense of ours... Do it today. Slavery was abolished in the 1800s.”

Pat Holloway, for Citizens UK, said Tesco was “benefiting from taxpayers' money by up to £364m a year” through tax credits providing “vital top-up income” for workers.

Lewis said pay was a “live issue” for the supermarket and that it “paid between 4 percent and 7 percent” more than rivals. He agreed to meet with Citizens UK but the company was reluctant to make outright commitments.

The chairman, John Allan, stressed that “we have to behave our way to a better reputation”, but added: “We don't want a position in which we act unilaterally and lose trade to our competitors.”

The store's latest figures were welcomed, however, as a 1.3 percent decline in UK sales at stores open more than a year in the last quarter beat City hopes, as well as listed rivals Sainsbury's and Morrisons, down 2.1 percent and 2.9 percent respectively. Asda's latest figures show a 3.9 percent fall. Bernstein analyst Bruno Monteyne said “the path should be set” for a return to growth at Tesco in the quarters ahead.

Lewis - who axed 2 000 staff with 43 store closures and is shutting Tesco's Cheshunt head office with 2 400 job losses - is also battling with falling food prices and changing shopping habits that have exposed its out-of-town stores.

He said the supermarket had claimed 180 000 customers back from its rivals as it focuses on putting more staff in stores to win back shoppers, and that Tesco had “sharpened up” on price by around 4 percent compared with competitors, according to industry figures from Kantar. Tesco is also trimming its ranges and improving availability in stores.