M&S readies for investor anger on pay
A STRONG set of first-quarter figures from retail bellwether Marks and Spencer this week looks set to be overshadowed by animosity at the firm’s annual shareholder meeting, with investors set to clash with executives over the eternally thorny issue of pay.
Sir Stuart Rose will officially hand over the chief executive’s reins to ex-Morrisons man Marc Bolland at the meeting on 14 July, though both men will be challenged by shareholders on their remuneration packages.
Rose, who will remain as chairman until he leaves the firm next year, will take a 25 per cent pay cut to £875,000 when he steps back into the non-executive role, though this figure is still higher than any of his FTSE 100 peers.
M&S has also irked some shareholders with the remuneration package handed to Bolland, who could earn £15.1m in his first year on the job. That figure includes compensation for bonuses he would have received had he stayed at Morrisons – a decision which provoked the ABI to issue an amber-top alert, warning shareholders to exercise caution in voting.
Proxy voting group Manifest has also signalled discontent with the pay proposals, commenting in a report on M&S that this year marks the fifth successive year that the remuneration committee had granted “exceptional awards” to directors. This represented a “flagrant abuse” of their discretion, Manifest added.
However, investor tempers are likely to be soothed on Wednesday as M&S reports solid like-for-like sales increases. Analysts expect first-quarter food sales growth of 1.5 per cent, and three per cent in general merchandise.
TIME LINE | RECENT SHAREHOLDER PAY REVOLTS
● 5 May
32 per cent of Xstrata’s investor base gave a thumbs down to the mining giant’s pay report, after chief executive Mick Davis saw his total pay leap 41 per cent to $7.75m despite a £4.2bn rights issue.
● 28 May
HSBC faced a small-scale mutiny at its AGM when almost one in four shareholders failed to back the remuneration report. Chief Michael Geoghegan’s £800,000 London-Hong Kong relocation package was a major sticking point.
● 2 July
Supermarket Tesco suffered the biggest shareholder pay revolt of the year so far when almost 40 per cent of investors voted against its remuneration report.
● 14 July
Retailer M&S is set for a stormy ride over pay at its own annual meeting.