More than 207,000 staff at Tesco, ranging from checkout workers to store managers, are set to share £98 million in bonuses after the supermarket’s recent results, it will be confirmed today.

Under Tesco’s “Shares in Success” scheme, disclosed in the company’s annual report published today, staff will receive free shares worth the equivalent of 3.6 per cent of their annual salary to a maximum of £3,000. All staff who had been with Tesco for at least a year by the end of February are entitled to the bonus.

Shares are held in trust for five years and then may be sold by employees on a tax-free basis. About 66,000 Tesco staff who have held shares in the scheme since 2004 also become eligible today to sell, on a tax-free basis, the £37 million worth of stock they were awarded five years ago.

News of the payouts comes five weeks after Tesco, Britain’s biggest private sector employer, reported that annual profits had broken through the £3 billion barrier for the first time.

The bonuses, a record for Tesco, come on top of £238 million paid last year to management and staff through incentive and share schemes. This includes £21 million of pay and bonuses to Tesco’s executive board, led by Sir Terry Leahy, the chief executive, who is thought to have received pay and bonuses totalling just over £5 million.

It is understood that pay for Tesco’s executive board is down slightly on last year because the company, despite setting a profits record for a UK retailer, failed to hit all its financial targets.

In the past 12 months Tesco’s share of the UK grocery market has slipped amid the most intense competition in the sector during the past decade. Its share of the market, during the 12 weeks to March 22, slipped from 30.8 per cent to 30.4 per cent, according to TNS Worldpanel, the market researcher.

Tesco responded to the market-share loss by launching its own range of “discounter” brands specifically aimed at heading off the threat posed by Aldi and Lidl, the German discount retailers, although critics say that this has distracted it from competing more effectively with its main rivals – Asda, Sainsbury’s and Morrisons.

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