Tesco’s chief executive has been handed a £6.42m pay package, the biggest annual haul for an executive at the supermarket since the departure of Sir Terry Leahy nearly a decade ago.

Dave Lewis’s total pay rose by more than a third last year, thanks to a leap in annual and long-term bonus payouts.

Lewis, who will leave the business in September, has received a £2.4m annual cash bonus and another £2.4m long-term share bonus on top of £1.6m in basic salary and benefits. His basic salary alone is 355 times that of the lowest-paid average employee.

The long-term share bonus was bolstered by £1.6m based on Tesco’s share performance against rival retailers. That share price measurement was given a lift after the company’s remuneration committee decided to remove the online grocer Ocado from the list of rivals.

A note in Tesco’s accounts shows that if Ocado’s stellar share performance had been included, Lewis and his finance director, Alan Stewart, would have lost out on about £2.5m in share bonuses between them.

The report says: “As Ocado has seen a significant shift away from being a retail-focused business towards a technology-focused business during the performance period, the [remuneration] committee decided to remove Ocado from the [total shareholder return] benchmark from 16 May 2018. This was the date on which a clear pattern emerged of Ocado pursuing a technology strategy.”

The multimillion-pound payments are the largest Tesco has paid to its chief executive since the departure of Leahy, who received £7.1m in his last year at the business.

Lewis is to leave Tesco on 30 September and will be succeeded by the Boots executive Ken Murphy. As a “good leaver”, Lewis will also receive a portion of his annual bonus for the current financial year, which could amount to more than £1.8m.

He will also be entitled to a proportion of share bonuses, partly dependent on performance of the company, over the next few years.

The multimillion-pound payouts are likely to be particularly controversial after Tesco was forced to defend a decision to pay a £635m dividend to shareholders while accepting a similar-sized tax break from the government’s emergency coronavirus support package.

The Labour peer Andrew Adonis said it was “absolutely wrong” for Tesco to accept a business rates holiday worth £585m and said the retailer should “pay it back” if it could afford to pay a big dividend to shareholders.

On Wednesday, the shareholder advisory group Pirc said it had already raised concerns that Tesco’s pay structure was “producing excessive results”.

Tim Bush, the head of governance and financial analysis at Pirc, pointed to the adjustment to the scheme relating to total shareholder return: “The fact that Ocado was included, only to then be taken out, does raise questions. That’s rather different to omitting it altogether.”

The company’s annual report meanwhile reveals Tesco paid a £10.7m lump sum payment in March to the former chief executive Philip Clarke in a settlement relating to his pension payments.

Clarke, who stepped down in September 2014, ceased employment with Tesco in January 2015 shortly after the discovery of an accounting black hole and a period of poor performance.

Lewis’s hefty payouts emerged on the same day that Morrisons revealed that its chief executive, David Potts, received a total £4.2m pay package last year including a £2.3m long-term share bonus. The payout was slightly down on Potts’ previous annual package of £4.5m but is likely to raise eyebrows given that the boss of the Bradford-based supermarket earned nearly two-thirds that of Tesco’s chief executive despite running a business less than a third of the size of its bigger rival.