Tesco was facing fresh turmoil on Friday as the supermarket confirmed that Laurie McIlwee, its embattled finance director, has quit just days before the company is expected to announce a new decline in profits.
In a statement released to the stock exchange Tesco said McIlwee had "decided to step down from the board and resign from the company but has agreed to remain in his role to ensure a smooth handover to his successor".
He will leave the business once a replacement has been found and is likely to walk away with a pay-off of around £1m to cover his one-year contract and potentially a larger sum to cover share options he has been awarded.
McIlwee's departure comes after months of speculation about his future and amid reports of disagreements over strategy with chief executive Philip Clarke, who is trying to reverse shrinking sales and falling profitability at the supermarket chain.
In February Tesco formally abandoned its profit margin target of 5.2% which, despite its recent problems, had remained the highest in the industry.
That was followed by last month's industry data which showed its UK market share had shrunk to 28.7%, its lowest level in almost a decade.
The pressure on McIlwee, who has worked at Tesco since 2000, has been growing before upcoming annual results on 16 April when analysts expect underlying profits to fall back to £3bn from £3.2bn – the second consecutive decline.Last year's fall was the first in a generation. In 2012 Tesco made £3.8bn.
McIlwee joined Tesco from PepsiCo in 2000 and was promoted to the board in 2009 when he took on the finance brief.
He earns a basic salary of £863,000 and is likely to be entitled to a pay-off of one year's salary.During his tenure he has amassed a £5.2m pension pot and been awarded 2.7m share options.
"I am proud of what we have achieved at Tesco over the last few years," said McIlwee in the statement.
"However, after 14 years at Tesco I feel that now is the right time for me to pursue new opportunities. I wish Philip and the team well and I am absolutely confident that Tesco will emerge from the current period of unprecedented change in the industry stronger than ever."
Tesco said it had begun looking for a new chief financial officer and that both internal and external applicants would be considered.
Its chairman Richard Broadbent said: "Together with Philip and the wider team, Laurie has played an important role in our process to transform Tesco and position it to be a winner in the new era of retailing. I and the board wish him every success for the future."
Insiders played down reports of a bust up over strategy between the two men but conceded McIlwee had had a difficult relationship with some analysts. Headhunters are yet to be appointed but it is thought that investors would welcome the appointment of an external candidate.
theguardian.com
In a statement released to the stock exchange Tesco said McIlwee had "decided to step down from the board and resign from the company but has agreed to remain in his role to ensure a smooth handover to his successor".
He will leave the business once a replacement has been found and is likely to walk away with a pay-off of around £1m to cover his one-year contract and potentially a larger sum to cover share options he has been awarded.
McIlwee's departure comes after months of speculation about his future and amid reports of disagreements over strategy with chief executive Philip Clarke, who is trying to reverse shrinking sales and falling profitability at the supermarket chain.
In February Tesco formally abandoned its profit margin target of 5.2% which, despite its recent problems, had remained the highest in the industry.
That was followed by last month's industry data which showed its UK market share had shrunk to 28.7%, its lowest level in almost a decade.
The pressure on McIlwee, who has worked at Tesco since 2000, has been growing before upcoming annual results on 16 April when analysts expect underlying profits to fall back to £3bn from £3.2bn – the second consecutive decline.Last year's fall was the first in a generation. In 2012 Tesco made £3.8bn.
McIlwee joined Tesco from PepsiCo in 2000 and was promoted to the board in 2009 when he took on the finance brief.
He earns a basic salary of £863,000 and is likely to be entitled to a pay-off of one year's salary.During his tenure he has amassed a £5.2m pension pot and been awarded 2.7m share options.
"I am proud of what we have achieved at Tesco over the last few years," said McIlwee in the statement.
"However, after 14 years at Tesco I feel that now is the right time for me to pursue new opportunities. I wish Philip and the team well and I am absolutely confident that Tesco will emerge from the current period of unprecedented change in the industry stronger than ever."
Tesco said it had begun looking for a new chief financial officer and that both internal and external applicants would be considered.
Its chairman Richard Broadbent said: "Together with Philip and the wider team, Laurie has played an important role in our process to transform Tesco and position it to be a winner in the new era of retailing. I and the board wish him every success for the future."
Insiders played down reports of a bust up over strategy between the two men but conceded McIlwee had had a difficult relationship with some analysts. Headhunters are yet to be appointed but it is thought that investors would welcome the appointment of an external candidate.
theguardian.com
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