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The Financial Times reports that Tesco has created a separate and distinct incentive program for its US operations, which FT suggests “underlines the importance of the American launch for the UK chain.” For its part, Tesco says that the incentive plan was need “to ensure it could attract great talent” for an expansion in which it will invest $500 million annually in just the first few years.

Tesco CEO Sir Terry Leahy will be the chief beneficiary of the incentive plan, receiving as much as $22 million (US) worth of stock in the company’s US rollout meets expectations. Tim Mason, who moved over from the UK to run the US business for Tesco, could get as much as $18 million (US) worth of stock as part of his incentive package. And, FT writes, millions of shares of Tesco stock will be awarded to company employees if the US rollout is successful.
KC's View:
Incentives are good. In fact, incentives are the best way to get the most out of people, because it makes them feel like partners with a stake in the business, not just employees and functionaries.

We remember once, years ago, we were working for a company that had promised us an annual review as part of our employment agreement. When we sat down with top management at the end of our first year, the general agreement was that we had met or exceeded virtually every benchmark during the first year, providing almost all the editorial content for a new website. When we then asked what that meant in terms of salary, we were informed that it meant nothing – that nobody above a certain level was getting any salary bumps, despite the contractual obligation to give us a review. “We gave you a review, just not an increase,” they said. The upshot was that we didn’t feel incentivized, we accused them of breaching our contract agreement, they felt we were being unreasonable, and the relationship deteriorated from there – mostly because they didn’t want to share the wealth.

It was a great object lesson for us. And it is those kinds of experiences that have colored our perspectives on the business world.

What Tesco is doing is smart, because it creates community and teamwork and partnership. And, we’d suspect, that will be a winning combination for the company’s US efforts.