Rose says Bolland's £1m is 'fair wage'

Published on Monday 1 March 2010 20:02

MARKS & Spencer's chairman, Sir Stuart Rose, has defended the controversial pay package being offered to the company's new chief executive, Marc Bolland, describing the £975,000 salary as a "fair wage".

Rose was commenting amid claims that leading shareholders in the group want to see a cut in Rose's own 1.15m pay package when Bolland arrives from Morrisons.

Bolland will receive a package of up to 15m when he joins later this year, although the figure depends on performance-related incentive payments and includes compensation for share options sacrificed at Morrisons.

Rose said the salary offered to Bolland as part of the package was at a level to be expected of someone running a business the size of Marks & Spencer.

"We are paying him a fair wage," he said. "It is a lot of money, but it is the sort of wage that a man running a business of this size would command,"

Rose said that if Bolland achieved the targets set under long-term incentive schemes, "the shareholders will be happy, the customers will be happy, the staff will be happy. The business will be doing very well".

Rose has previously defended Bolland's deal by saying: "If you pay peanuts, you get a monkey."

When Bolland joins, Rose will give up his current executive chairman role to take on a non-executive chairman's position at M&S, before stepping down in the summer of 2011.

Some institutional shareholders have called for Rose's own pay to be reduced following the boardroom change, given the general economic climate.

It is understood that no decision has yet been made by the company on his future pay level.

The high street giant has warned of tough times ahead for shoppers in 2010, despite the retailer's first like-for-like sales growth in more than two years, during the 13 weeks to 26 December.

Last year, the group reported a 40 per cent drop in full-year profits to 604 million and slashed its dividend payment by a third – the first dividend cut since 2000.

Meanwhile, the company has confirmed ambitions to become the world's most sustainable retailer by 2015, following what Sir Stuart Rose described as the better-than-expected success of its Plan A environmental project.

"We launched Plan A back in 2007, and fundamentally that has been so successful that what we decided to do was accelerate phase two of that, but put bigger and tougher targets in," he said. "What we have been able to do is reduce prices, increase the wages that we are paying to people in the Indian and African subcontinents and pass on to our customers goods which are sourced in a more ethical way."

Plan A, launched in 2007 with 100 commitments in five areas, including climate change, sustainable raw materials, waste and health, had also achieved 50m in efficiency savings.

Marks & Spencer said it would now work with clothing suppliers in Bangladesh, Sri Lanka and India to agree a fair, living wage for workers, having successfully completed a pilot programme in Bangladesh.