M&S reveals revamped executive pay scheme

Marks & Spencer yesterday unveiled a shake up of its executive pay scheme as it looks to avoid a repeat of last year's AGM clash with shareholders.

The retailer wants to align pay more closely with the strategy unveiled by new chief executive Marc Bolland, who wants UK sales to rise by up to 1.5 billion in three years and for online and international sales to double.

It also emerged yesterday that the high street stalwart paid Bolland a package of cash and shares worth 4.4 million for the year to March, which included a base salary of 894,000 and 2.6m in compensation for share awards he gave up when he switched from Morrisons.

This total could rise to 13.8m if M&S meets its performance targets and restricted shares are released, although this is below previous estimates of 15m because M&S paid out an annual bonus of 45 per cent of salary.

Overall directors pay increased by 35 per cent to 11.6m in the year, with 2.8m paid to former executive chairman Sir Stuart Rose, which included a 1.36m bonus on top of his 897,000 salary.

At last year's annual meeting, 16 per cent of shareholders voted against the remuneration report, amid concerns over the amount offered to persuade Bolland to switch jobs.

The new scheme reduces the maximum executives can receive through both their annual bonus and the long-term incentive plans, but it broadens the performance criteria to include targets for revenue growth and underlying profitability after criticism it was too narrowly focused on earnings previously.

Bolland said last month M&S would redesign its UK stores after customers complained the outlets were "difficult to shop" in, while products would be selected in line with local criteria.

The chain, which runs 600 stores in the UK and 300 overseas, posted a 12.9 per cent increase in underlying pre-tax profits to 714m in the year to 2 April.