Dutch Marc Bolland will receive the package in pay, bonuses and compensation for giving up his previous job when he becomes chief executive of M&S on 1 May.
Britain’s biggest clothing retailer said Bolland would earn a basic salary of £975,000 and an annual bonus of up to 250 per cent of his salary. He will also get a performance-related share award which could be worth up to 400 per cent of his salary in 2010/11.
In addition, M&S will compensate Bolland for awards he forfeited by giving up his role as chief executive of Morrisons, which he is leaving after working six months of a 12-month contract. He joined the supermarket in 2006.
M&S investors are likely to greet yesterday’s announcement by the clothing and food retailer with a sigh of relief after a tense time while the company has sought a successor to outgoing chief executive Sir Stuart Rose.
The FTSE 100 company has faced criticism in the City for flouting corporate governance rules by deciding to give Rose the post of executive chairman.
Rose, who joined M&S in 2004 and became executive chairman in March 2008, will stay on as part-time chairman until July 2011 at the latest. His current salary is £1.1m.
Bolland will get £1.6m in cash and £1m in shares for the loss of a bonus and Morrisons share awards that would have been vested in 2010. And he will get a further £4.9m in share awards to compensate for a further tranche of Morrisons shares that would have vested in 2011 and 2012.