SAINSBURY chief executive Justin King and Marks & Spencer boss Marc Bolland have both seen their bonuses cut after failing to meet targets, as the recession forced them to slash growth plans.
The cuts come amid a recent wave of shareholder upheaval against excessive executive pay which has swept across boardrooms including Aviva and Inmarsat.
Tesco boss Philip Clarke last month opted not to take an annual bonus of £372,000 following the firm’s poor performance in the UK, while Ocado chief Tim Steiner also waived his bonus after the online retailer failed to make a pre-tax profit.
Sainsbury’s annual report published yesterday showed that King took a nine per cent cut in his total pay package to £3.37m, despite Britain’s third largest grocer recently posting a seven per cent rise in full-year profit.
His salary increased by two per cent to £920,000 but his annual bonus dipped by £6,000 to £514,000 after the company said it failed to meet ambitious sales targets set at the beginning of the financial year.
But Marks & Spencer’s annual report, also out yesterday, showed its chief executive has taken the biggest pay cut to date among Britain’s leading retailers. Bolland received a total pay and bonus package of just under £1.7m last year, over 60 per cent below the £4.4m he received the year before.
Even excluding a £167,000 relocation fee and a £2.6m golden hello he received for leaving his previous employer in May 2010, the Dutchman’s total package was down.
On top of a basic salary of £975,000, pension contributions and perks such as a car and driver, Bolland’s bonus of £633,000 – including half paid in shares – fell from £1.02m last year.
The majority of his bonus is based on targets set at the beginning of the year that Marks & Spencer failed to meet, after a 1.2 per cent drop in profits – its first fall in three years.
The rest of Bolland’s bonus comes from meeting personal targets and makes up roughly a third of his potential bonus, which can be worth up to 200 per cent of salary.
M&S shares closed up 2.9 per cent at 340.5p yesterday while Sainsbury’s dipped 0.1 per cent to 289.1p.