Safeway boss set for £4m bonus

SAFEWAY is spending up to £4m on a bonus scheme for the Argentinian boss who revived its fortunes. Carlos Criado-Perez will earn an extra £2m in 2004 and another £2m in 2005 if he delivers 10% earnings growth over that time.

The payout is on top of his £848,000 annual pay package and £129,000 company pension contribution.

A Safeway spokesman said: 'Doesn't a leader deserve some recognition? Carlos is an international retailer. He's not an accountant from the Midlands. Naturally, we want to hang on to him. The likelihood is that Safeway wouldn't have existed as an independent company if Carlos hadn't taken it on.'

Former Wal-Mart executive Criado-Perez, who speaks six languages and a retailing career that has spanned the globe, replaced ousted Colin Smith as Safeway chief executive in November 1999.

Since then, the shares have doubled from 154 3/4p to 304p, down 1/2p, though they have fallen back from a high of 419p a year ago. Safeway's value has gone up from £1.6bn to £3.2bn.

Even if he fails to hit the maximum bonus jackpot, Criado-Perez, 50, will qualify for incentives on a sliding scale, with a minimum of £1m in each of the two years, provided he delivers growth of around 6%. He is also sitting on a paper profit of £500,000 on his share options. Last year, earnings grew by 11%. The company insists the targets are tough.

Sir Terry Leahy, boss at Tesco, more than five times the size of Safeway, earned a £2.46m pay and bonus package last year. Sir Peter Davis at Sainsbury has a £1m pay package, but is sitting on £3m worth of options at today's share prices.

David McCarthy, analyst at Schroder Salomon Smith Barney, does not foresee a shareholder outcry over Criado-Perez's bonus. 'If he can deliver those targets, he will have earned them, given that he is starting from a weak position in terms of scale.'