Tesco is making some good strides so far in 2015 in its attempt for a course correction. The company struggled mightily in 2014, which led to a full year pre-tax loss of £6.4 billion, one of the largest in UK corporate history. Former chief executive Philip Clarke decided to step down and Dave Lewis has since taken the reins.

UK sales declined 1.3% for the first three fiscal months of the year, ending May. Compare that with a 4% decline last year and the analyst forecast of a 1.6% to 3% slide. That’s great news for a company that so desperately needs it. According to the BBC, Lewis says, “We are fixing the fundamentals of shopping to win back customers and relying less on short-term couponing.”

One of the things Tesco is doing is cutting back on its selection. For instance, it has trimmed its variety of sandwiches in order to provide more of the most popular ones. The same has been done with its fruit and bakery offerings.

Trouble from shareholders

But while Lewis seems to be working wonders to help Tesco back on its feet, shareholders are furious with him. In Tesco’s remuneration report, it states that Lewis was paid £4.13 million for just six months of work last year. On top of that, Clarke also received a £1.2 million “loss of office” payout.

One shareholder who voiced his disgust said that the company should adopt a new slogan: “We do not pay the living wage but we do make our executives millionaires for failure.”

To the issue of the company’s low wages, chairman John Allan promised he would meet the low-wage campaigners within 6 months, saying that he cannot make “an open-ended commitment to pay the living wage until a way can be found that doesn’t competitively disadvantage Tesco.”

But this is the problem, isn’t it? For a company who has just lived through one of the worst years in UK corporate history, yet still paid its chief executive £4.13 million for only half a year’s work, it seems that it’s already making a decision that competitively disadvantages Tesco.

Of course, this problem isn’t unique to Tesco. One only needs to look to the American banking industry to see such a double standard in action. But the fact that more than 18% of shareholders failed to back the report because of this issue means that Tesco needs to take a long, hard look at it.

How serious is Tesco

Unfortunately, we live in a world where CEOs are expected to make millions a year, regardless of how the company is doing. It’s likely that not much will be done to appease shareholders in this regard. However, the management team should take it into consideration in an attempt to appease its shareholders. After all, they are the owners of the company. It will be interesting to see how Tesco continues to improve. On all accounts.