Mrs M&S tightens her purse strings, as Steve Rowe's total pay cut by £400,000

Hayley Kirton
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Shoppers walk past a Marks and Spencer s
Never mind the discounts in the store: The savings people are talking about today are in the retailer's annual report (Source: Getty)

Marks & Spencer's Steve Rowe has recently tried his hand at profiling to understand what his customer considers value for money, but it's the figures in the retailer's remuneration report that might be more interesting to him at the moment.

The retailer's annual report, which was released yesterday, revealed that the new chief executive's pay had been reduced by just shy of £400,000 for the company's 2016 financial year.

Rowe has been paid a little over £1m for his efforts in 2015-16, while he was paid £1.4m the year before, with the reduction mainly caused by his bonus dropping to £230,000 from £653,000.

A closer look at the annual report reveals just why Rowe is trying to bolster Marks & Spencer's flagging non-sales division, as it notes that his measures were amended to reflect a change in responsibilities from food to clothing and home.

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While the 2015 annual report shows that Rowe beat his stretch target for business unit profit and fell between his target and his stretch on individual objectives, bagging him a bonus of 124.4 per cent of his salary, the 2016 report shows that he only came in between the threshold and his target on both measures, earning him a bonus of just 41.4 per cent of his salary.

Former chief executive Marc Bolland also has less in his back pocket from the most recent financial year, earning a little over £2m, compared with £2.1m the year before. However, while Bolland's pay cut was driven by awards which vested in the earlier year but not the more recent one, his bonus was increased from £596,000 to £622,000, even after being revised down 20 per cent by the remuneration committee to reflect the retailer's overall performance.

Marks & Spencer revealed in its most recent set of results that its profits had dropped by a fifth, causing share price to quickly tumble 8.3 per cent.

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It's not all bad news for Rowe, however. Although his bonus may have been less than he hoped for, his salary was pushed up when he took up his role as chief executive in April, increasing by 45.4 per cent from £557,000 to £810,000.