Tesco CEO Salary 2025/26: How It Compares to Worker Pay and Minimum Wage Rates

Tesco CEO Salary 2025/26: A Deep Dive into Pay, Ratios, and the Minimum Wage Context

The tesco ceo salary has become a flashpoint in debates about fair pay in the UK. In 2025/26, Tesco chief executive Ken Murphy received total remuneration of £10,842,069, according to the company’s annual report The Guardian. That is an increase of more than £1m from the previous year and places Murphy among the highest-paid FTSE 100 bosses. But what does this mean for the thousands of Tesco workers who earn hourly rates close to the statutory minimum?

Breaking Down the Tesco CEO Pay Package

Murphy’s pay is made up of several components. His base salary rose 3% to £1.54m. On top of that, he received a £3.4m annual bonus (short-term incentive plan) and a £5.7m long-term incentive award, largely in shares The Guardian. The long-term bonus was almost a quarter below the maximum possible because Murphy missed a food waste reduction target. The total package is more than double the median FTSE 100 CEO pay of £5.06m reported by the High Pay Centre for the same period High Pay Centre.

Tesco’s remuneration policy sets out that the CEO could earn up to £11.59m on target and more if the share price rises Tesco Annual Report. The policy also notes that salary increases for executives are normally in line with those for other colleagues, but the gap between the CEO’s total pay and the average worker’s earnings has widened significantly.

The CEO-to-Worker Pay Ratio

Tesco’s annual report reveals that the CEO-to-worker pay ratio worsened from 373:1 to 420:1 in the past year The Grocer. This means Murphy’s total pay is 420 times the median pay of a Tesco employee. For context, the High Pay Centre reports that the median FTSE 100 CEO is paid 130 times the median UK full-time worker (£39,039) High Pay Centre. Tesco’s ratio is far higher, reflecting both the CEO’s high pay and the relatively low wages of many store and distribution staff.

How Tesco Worker Pay Compares to Minimum Wage Rates

Tesco’s hourly rate for colleagues is £13.28, following a 5.1% increase in March 2026 LSE regulatory news. That is above the current National Living Wage of £12.71 for workers aged 21 and over, but below the real Living Wage calculated by the Living Wage Foundation (£13.45 nationally, £14.05 in London) The Grocer. For younger workers, the gap is even larger. The National Minimum Wage for 18–20 year olds is £10.85 per hour, and for under-18s it is £8.00 per hour. An 18-year-old Tesco worker earning £10.85 would take home roughly £21,000 a year if working full-time, compared to the CEO’s £10.8m.

It is important to note that the statutory minimum wage rates are age-banded. Workers under 21 are entitled to lower rates, and apprentices have a separate rate of £8.00 per hour. Tesco does not publicly break down its workforce by age, but many entry-level roles in retail are filled by younger workers who may be on the lower age bands. The UK Minimum Wage site provides a full breakdown of current rates and eligibility.

The Bigger Picture: FTSE 100 CEO Pay Trends

The High Pay Centre’s 2025/26 analysis shows that median FTSE 100 CEO pay rose 8.6% to £5.06m, while mean pay fell slightly to £5.89m (largely due to one exceptionally high award the previous year) High Pay Centre. A total of 66 firms (70%) increased their CEO’s pay package. The report also notes that 97% of CEOs received a short-term bonus, and 80% received a long-term incentive. The average long-term incentive payment rose 20% to £2.71m. These trends show that executive pay continues to climb, even as many workers struggle with the cost of living.

Tesco’s CEO pay is at the upper end of the FTSE 100. Only a handful of CEOs earned more than £10m. The company argues that Murphy’s pay reflects strong performance: Tesco reached its highest market share in a decade and delivered over £2.2bn in savings through its ‘Save to Invest’ programme LSE regulatory news. However, critics point out that the same programme has not lifted worker pay to the real Living Wage.

What This Means for Job Seekers and Workers

If you are considering a job at Tesco or any large retailer, understanding the pay structure is vital. The hourly rate of £13.28 is competitive within the sector, but it is still below what the Living Wage Foundation considers a minimum acceptable standard. Meanwhile, the tesco ceo salary highlights the vast gap between the top and the bottom of the organisation. For workers on age-banded minimum wage rates, the disparity is even more stark.

Our pay guides offer detailed comparisons of hourly rates across different age groups and sectors. You can also explore pay data to see how Tesco’s rates stack up against the National Living Wage and real Living Wage benchmarks.

Protests and Shareholder Activism

The pay gap has not gone unnoticed. At Tesco’s 2026 AGM, campaign group Organise presented a petition protesting the widening gap The Grocer. They argue that Tesco workers are paid 17p below the real Living Wage nationally and 25p below in London. The CEO of fair-pay app Wac, George Fairhall, said: “When the people stacking the shelves are kept a few pence ahead of minimum wage while the CEO takes home £10.8m, that’s not a hard business decision, it’s a choice about who matters.” Tesco responded by noting its above-inflation pay increases and its commitment to negotiating with unions.

Conclusion

The tesco ceo salary of £10.8m in 2025/26 is a clear example of the growing divide between executive and worker pay in the UK. While Tesco’s hourly rate of £13.28 is above the statutory National Living Wage, it still falls short of the real Living Wage. For younger workers on lower age-band rates, the gap is even larger. Understanding these figures helps workers and job seekers make informed decisions about their employment and pay expectations.

For the latest statutory rates, visit our UK Minimum Wage page. And if you want to see how your own pay compares, check our pay guides for detailed breakdowns by age and sector.