Shareholders threaten revolt over 'excessive' pay at M&S

MARKS & Spencer faces a shareholder revolt at its annual general meeting later this month as two investor groups issued warnings over the firm's "excessive" boardroom pay and bonuses.

Manifest, the proxy voting agency which has institutional investor clients with funds of 3 trillion, criticised the firm's exceptional bonus payouts as "flagrant abuse" of M&S's performance plan. The Association of British Insurers has also issued an "amber top" warning to investors over boardroom pay.

A report by Manifest said the 15.1 million pay reward for new chief executive Mark Bolland was "excessive" and the remuneration committee's persistent awarding of what should be only occasional bonuses was censured.

The report said: "While an exceptional award once (or maybe twice) during the ten-year life of the plan would not be unreasonable, five consecutive "exceptional" awards represents a flagrant abuse of the discretion assigned to the remuneration committee to make such awards."

An M&S spokesman said Manifest's view was "not one we share" and that "it will be up to our shareholders to decide when they vote at the annual general meeting". The meeting will take place on 14 July.

On Wednesday the retailer is set to report a third consecutive rise in underlying quarterly sales, though the rate of improvement may have slowed, highlighting the fragility of the consumer recovery.

Analysts expect that Britain's biggest clothing retailer will report that sales at UK stores open more than a year rose 1 to 4 per cent in the three months to end June, its fiscal first quarter.

This would represent a slowdown from growth of 5.1 per cent in the final quarter of the firm's last financial year.

Bolland is not expected to outline his plans for the business until the interim results are published in November.