Tesco has agreed to pay more £1.2m to former boss Philip Clarke and almost £1m to ex-finance director Laurie McIlwee as liquidated damages.
At the time of the company’s last interim results, it was noted that the payments were suspended during the investigation into the company’s overstatement of profits last year.
However, the company is contractually committed to make the relevant payment to each former director unless it can legally establish a case of gross misconduct.
Having taken legal advice, Tesco has concluded it does not have the basis for continuing to withhold the payments and the board decided that defending claims for the payments would not be in its best interests.
The Serious Fraud Office is continuing to investigate the commercial income issue. Tesco will review and potentially pursue recovery of the payments to Clarke and McIlwee if new information comes to light.