Tesco investors today gave the supermarket retailer a bloody nose after more than 40 per cent of those voting at its annual meeting in Glasgow opposed proposed changes to its share option scheme.

Tesco was asking for approval to extend the period during which current and retiring executives can exercise their share options from one year to three years.

RiskMetrics, the voting advisory service, had urged shareholders to oppose the changes, which would give directors 36 months to wait for an improvement in the share price and could be seen as diluting performance demands.

At Tesco's annual meeting in Glasgow today, the retailer was not questioned on its share options plan. But 41.03 per cent of the votes cast were against it.

With the backing of 57.23 per cent of its investors, Tesco can push through the plan, but will have been bloodied by the hostile response from its stock market owners.

Lucy Neville-Rolfe, Tesco’s corporate and legal affairs director, defended the scheme changes.

She said: “We have shareholders with options right down to store manager in Tesco. Because of the volatility of the markets, if they are retiring, or retiring for ill-health reasons – or even if there is redundancy – it means they lose out in the current market because they only have one year to exercise the options.”

Tesco, whose chief executive is Sir Terry Leahy, was also facing a special resolution tabled by the Unite again over improvements in working conditions for meat workers at the retailer's suppliers.

Only 11.21 per cent of the votes cast were in support of the resolution, which was defeated by a massive majority.

Tesco is the latest UK blue-chip to face an investor revolt over pay, bonuses or changes to performance targets this year. This week, over a third of investors voted against changes to executive bonuses at Home Retail Group, the owner of Argos and Homebase.

Investors vetoed remuneration reports at Royal Dutch Shell, the Anglo-Dutch oil and gas group, and Provident Financial, the doorstep lender. The voting is advisory only and companies can choose to ignore the outcome.

BP, one of Shell's main rivals, Xstrata, the miner, and Next, the retailer have all suffered large protest votes over remuneration this year.

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