The supermarket boss took home £4.15m, down from £4.63m the year before, after he earned only 75.6% of his potential short-term bonus.
The fall, disclosed in the annual report, came despite Tesco seeing a jump in profits and achieving its first annual sales growth in seven years.
Mr Lewis' base salary remained at £1.25m and will stay flat this year.
The chief executive has been guiding Tesco through a major turnaround since its 2014 accounting scandal, in which profits were overstated by £326m. In March, Tesco was fined £129m for the affair.
The retailer has also been trying to re-adjust to a price war brought on by the rise of German discounters Aldi and Lidl.
Green shoots of growth started to show after the grocery giant reported full year revenues had risen 3.7% to £59.8bn and full year operating profit up 30% to £1.28bn.
The head of the supermarket's remuneration committee, Deanna Oppenheimer, said: ''Tesco has had a strong year of progress, delivering against the three turnaround priorities of improving competitiveness in the UK, a more secure balance sheet and rebuilding trust, which were set in 2014.
Tesco's annual report for the 2016-2017 financial year also showed that chief financial officer Alan Stewart's total pay package was £2.24m, down 14% on the year before.
Tesco chief executive Dave Lewis saw his total pay packet cut by more than 10% last year.