Fury at M&S boss's pay and perks deal
MARKS & Spencer walked into a new row over corporate governance yesterday after it emerged incoming chief executive Marc Bolland could earn nearly £15million in his first year.
That includes several highly controversial elements, such as a £3.9million “golden hello” in the form of a guaranteed bonus in M&S shares and a further £7.5million package to compensate Bolland for missed bonuses from supermarket Morrisions, where he was the boss. The compensation package includes cash of £1.6million, with the rest in shares.
Bolland will also earn £975,000 a year in salary, up from the £850,000 he made at Morrisons, and is in line for a cash and shares bonus worth up to £2.4375million annually if he hits targets based on underlying earnings. He will also receive further share awards based on performance.
The package drew instant fire from corporate governance groups. A spokesman for specialist adviser Pirc said it was a package with “all the bells and whistles”, adding: “We are opposed to this sort of golden hello.
“It distorts the markets for executives and compensating directors for the loss of bonuses and incentives at their previous company makes a mockery of the idea that the already high levels of remuneration act to retain key people. Combined with the sizeable one-off share award, this is a bad start for the new regime at M&S.”
M&S said Bolland will start on May 1 after finally agreeing a departure date with Morrisons. He left the Morrisons board with “immediate effect”, but will be paid his salary until the end of April.
M&S faced constant criticism over corporate governance standards during the period when outgoing boss Stuart Rose was both chairman and chief executive, contravening best practice. Rose was also awarded a “golden hello”, worth £1.25million.
Rose’s salary is currently £1.13million. M&S shares rose 3¼p to 352p, valuing the business at nearly £5.6billion.
Morrisons shares rose 2¼p to 291¼p.