Tesco chief executive Ken Murphy has admitted he is “well paid” amid NGO group ShareAction calling for the supermarket boss to justify his £10m pay package.

In a post-earning call with journalists, the CEO acknowledged his high salary, but added that the figure was set by the board.

When asked about his pay that had faced criticism from NGOs Murphy said: “Look, I absolutely accept that I’m well paid. Remuneration is set by the board, and delegated by the owners of the company, the shareholders.

“Over two-thirds of it is variable and dependent on long-reaching and hitting exceeding long-term financial goals. And I wouldn’t really say any more than that,” he added.

Murphy’s response comes as shareholders are expected to question how the company can afford the executive’s pay packet, while its contract cleaners and security staff are paid less than the real living wage, at the grocer’s AGM today.

“In a world where Tesco are making a £2.3bn profit a year, paying those who keep the stores safe and clean the real living wage shouldn’t have to be asked for – it should be automatic,” said ShareAction head of good work Dan Howard.

“Unfortunately, Tesco are dragging their feet on taking the right steps to pay its third-party contracted staff the living wage. Failing to recognise the financial hardship many of those who work for Tesco have faced during the cost of living crisis will damage Tesco’s reputation with both shareholders and customers.”

The NGO’s actions follow Tesco last month confirming that Murphy’s pay packet had doubled in the past year as he took home £9.93m during the period, while it was also set award Murphy a pay increase of 3% in the upcoming year.

Despite the figure being almost 131 times the average Tesco worker’s, the grocer argued that this increase was “below the 9.1% increase provided to UK hourly-paid colleagues, who represent the vast majority of the UK workforce”.

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Murphy was also asked about an upcoming general election, and poll-favourites Labour’s manifesto proposals to increase workers rights, at which the CEO said he was not concerned about costs and flexibility to operate.

“I would start off by saying that we really, really we’re proud of the fact that we’re a leading employer in terms of our total package for our colleagues,” said Murphy.

“Many of the measures outlined in proposed legislation, we’re already ahead of. We don’t have any minimum our contracts, for example, in our in our business, so I’m not unduly worried. I think that you know, I believe that what we’re looking for in any legislation is legislation that looks after and protects the rights of workers is a good thing.

“It had the same time has to stimulate productivity, and they’ll have to stimulate economic growth and ultimately, jobs growth. And I think it’s getting that balance right is always the key. And we will, of course, support any government in achieving those three things.”

“We’re not trying to be Amazon”

Elsewhere, the CEO was questioned about Tesco’s ‘one-stop-shop’ online marketplace that launched last week (4 June).

Explaining the difference between the new platform and its previous venture Tesco Direct, which was launched in 2012 and scrapped 6 years later in 2018, Murphy said that the marketplace was “much more integrated” and that the retailer was “not trying to be all things to all people”.

“I think its really early days. So it’s very hard to give you any, any reaction because we’re this really a week in I think we’ve had some very positive early signals in terms of the number of orders.

“But I think the primary focus of marketplace is really to build out and extend the range of food and food related and home products available to customers.

“Just to be very clear, we are not trying to be Amazon, we’re not trying to be all things to all people.

He explained that the grocer is making “all of those niche products that you won’t necessarily find on our shop shelves” available to shoppers.

The retailer boss’s comments come amid reports earlier this week that Tesco’s SKUs have grown by more than a third following the launch of its marketplace.