Why Tesco should come clean on its CEO’s tax affairs
Last week we reported that Tesco chief executive Ken Murphy was paid £4.4 million for his work this year.
That’s a lot, but not out of line with peers (his Sainsbury rival got £3.8 million in the last reported figures).
The point of interest was that Murphy seems to be based in Ireland for tax purposes. Where he presumably pays less, and of course, nothing to the UK government where most of the business is based.
Initially, Tesco didn’t say anything at all. No confirmation, no denial, nothing.
Today it got it together to say this: “We don’t comment on any individual colleagues tax arrangements”, as if Murphy were a private guy who runs a warehouse in Wigan, rather than the CEO of one of the biggest and most important businesses in Britain.
In some ways, it may not matter that much where Murphy pays tax. He is Irish after all, he was born in Cork.
Maybe that’s what he would say if asked – people say he is a reasonable guy.
Still, the notion that his tax affairs are not a matter of public interest is plainly absurd.
As indeed, is the notion that Tesco doesn’t comment on this sort of stuff. It would, were it remotely in its interests to do so.
What happens next? Well, maybe nothing. But MPs have just launched an investigation into rising food prices amid concern that some in the trade are “unduly” benefiting from grocery inflation.
Supermarkets are always under scrutiny for this sort of stuff, since what they sell is so vital to the survival of the nation.
Mostly, they do well. They had a good pandemic and competition in the sector is so intense it is hard to see that there can be much price gouging in stores (suppliers might have a different story).
So they have a good story to tell. Why a CEO would risk that, risk having his views ignored just to save a few tax pounds, is not clear.
Unless there is much more to it than we know. The MPs should ask. Live on TV.
Beyond that, the news today is that one-in-five workers will be higher rate tax payers by 2027. That’s one in four teachers and one in eight nurses, says the Institute for Fiscal Studies.
In that context, Tesco regarding its £4m CEO’s tax affairs as a totally private matter looks out of key.
Wouldn’t it be better if CEOs declared just how much they had paid back, alongside the disclosures in the annual report about their share options and bonus schemes?
They could compete to see who paid most tax, rather than just who got the highest salary.