Internal, CE Internal Bonus Policy, Version 3, page 4 of 8 - July 2022
More details can be found in the Bonus Matrix.
Targets will be set for each business against agreed business plans, they will be challenging but achievable and
motivating. The basic criterion for any bonus award is Tesco Group profit. This means that a minimum level of
profitability must be achieved in our end-of-year results to get the bonus paid out.
Your contribution rating - during your EOY review you will receive an overall fair rating based on your "What"
and "How". If you receive different ratings for the "What" and "How", your overall weighting will be the lower
one of the two. A "Below expected" rating on either "What" or "How" results in a "Below expected" overall fair
rating.
Based on combination of "What" and "How" you can get the following overall ratings:
• Outstanding contribution: Colleagues outstanding and over-achieving
• Great: Colleagues overall, at or above expectations, accomplishing great things.
• Satisfactory: Colleagues contribute broadly in line with expectations, with opportunities to deliver more
• Below expected: Sometimes in line with expectation, but with some key gaps
A rating of 'Below expected contribution' won't generate any award under the individual element for
performance, but you'll still be eligible to receive an award for the Profit and Sales measures.
Your bonus will be paid to you partly in cash and partly in shares which will be released to you in the future,
provided you are still employed by Tesco and the conditions laid down by the company for their release are met.
WL4, WL5 and Executive
Committee members
1/2 cash & 1/2 shares (deferred for 2 years -
50% released after year one, 50% released
after year two)
WL3 2/3 cash & 1/3 shares (no deferral)
Example of the calculation of the final bonus % can be found in the Bonus Matrix (appendix to the policy).
4. International bonus terms
4.1. Eligible earnings
Bonus is calculated as a percentage of Eligible earnings. Eligible earnings are based on the annual base salary at
the end of the eligibility period and is calculated for each calendar day in the bonus positions.
The maximum percentage of the bonus pay-out for the evaluated period is defined in the Bonus Matrix. The
actual bonus percentage to be paid out is calculated according to the fulfilment of the criteria specified in the
Bonus Matrix.
4.2. Adjustment of the Eligible earnings
The Eligible earnings are adjusted for the period of absence, i.e. the number of calendar days without active
work. For example, sick leave, family member care, unpaid leave or career break, maternity and parental leave,
unauthorized absence, garden leave is taken into account. Days without active work do not include holiday and
recondition leave (valid for the CZ).
Eligible earnings are adjusted if the sum of days of absence exceeds 30 calendar days in the evaluated period. In
this case, the total number of the days with absence will be deducted from the total number of days in the bonus
position. Only days of absence during the evaluated period - during the performance of the bonus position, are
considered.