M&S survives shareholder rebellion over new chief 's £15m pay package

Published on Wednesday 14 July 2010 15:57

MARKS & Spencer yesterday withstood a threatened shareholder rebellion over its executive pay plan with more than 90 per cent of investors backing the £15 million package awarded to new chief executive Marc Bolland.

• A man carries a cardboard figure of Marks and Spencer Chief Executive Officer Mark Bolland into the company's annual general meeting. Picture: Getty

Britain's biggest clothing retailer said its remuneration report was endorsed by 91.4 per cent of voting shareholders, with 8.6 per cent opposing.

These figures exclude the number of withheld votes, which was not immediately available. Britain's shareholders have been taking a more robust line on management pay during the economic downturn, although they have rarely forced through any changes.

Earlier this month, 47 per cent of shareholders in Tesco, the country's biggest retailer, either voted against or abstained in a vote over executive pay.

A number of private investors attending the annual general meeting in London complained about the package for Bolland who was poached last November from Wm Morrison, the supermarket chain.

"The only difference between you and me is I still need to do the lottery. You don't," one said to him during the meeting at the Royal Festival Hall.

However, executive chairman Sir Stuart Rose, who has been the subject of shareholder rebellions at the two previous annual shareholder meetings, stressed Bolland would only get the bulk of his pay award if he met stretching performance targets.

Rose has had a rocky relationship with shareholders since 2008 when he combined the roles of chairman and chief executive against corporate governance guidelines. He will become non-executive chairman on 31 July and is scheduled to stand down as chairman next March.

M&S is battling to recover from a bruising recession, when it was hit by competition from discount clothing chains such as Primark.

M&S - which serves 21 million Britons a week from more than 650 stores and has about 300 shops abroad - was also hit particularly hard in its upmarket food business.

However, it has enjoyed greater success recently with new clothing line "Indigo" and its cheaper "wise buys" range in food. But analysts are keen to hear Bolland's longer-term plans, which he will outline alongside interim results in November.

Rose said there were signs British consumer confidence had started to improve since a 22 June Budget which announced tax hikes and public-spending cuts to rein in government borrowing. His sentiment was more upbeat than that of Bolland, who warned in last week's trading update of tougher times ahead, despite flagging a 3.6 per cent rise in same-store sales in the company's first quarter.

The figures, which beat market forecasts of a 2.3 per cent rise, marked the chain's third consecutive quarter of sales growth.

But Bolland said the effects of the Budget were still likely to be felt in the coming months.

Many retailers and analysts also remain cautious and a survey earlier yesterday showed consumer morale fell to its lowest level for a year in June.

M&S shares closed down 1.3 per cent at 349.1p.

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