Shareholders in a rage over Tesco chief's pay package

Shareholders of British grocer Tesco are none-too-pleased with the proposed bonus package for Sir Terry Leahy, which would pay him as much as £11.5 million, or $23.1 million, in addition to his regular salary. 17% of shareholders declined to support the pay package. According to TimesOnline, "Sir Terry, who received £4.62 million in cash and shares last year, would pocket up to 2.5 million shares under the New Business Incentive Plan if Tesco cracks the US market. The shares would gradually vest between 2011 and 2014. The scheme only applies to the chief executive."

Now there's an incentive for global expansion!

While the pay package certainly seems excessive, it's a relative pittance compared to the amount that Tesco is wagering on a successful foray into key U.S. markets including Las Vegas and Phoenix. The company will be investing over half-a-billion dollars per year in the effort, so why not offer Sir Terry a big chunk of change if all goes well?

Compared to some of the pay packages CEOs here are receiving, it just doesn't seem that bad. The gradual vesting of the restricted stock means he will only stand to get really really rich if the company grows well. If it does, shareholders will have little to complain about.