M&S wins backing for 'less stringent' pay plan

Marks & Spencer boss Stuart Rose will have to meet tougher targets to earn this year’s potential £4.2m (€6.2m) share bonus after the retailer succumbed to shareholder pressure, it emerged today.

The food-to-fashion chain has upped the earnings per share targets that its boss must meet in an attempt to head off shareholder dissent after warnings from the Association of British Insurers (ABI), whose members control 20% of UK company equity.

It is understood that Marks & Spencer planned to push through less stringent long-term incentive performance goals for the current financial year by cutting the earnings per share target range from between 5% and 12% above inflation to 4% and 10%.

The pay proposals could have seen Mr Rose pick up a potential shares bonus of four times annual salary, matching last year’s £4.2m (€6.2m) long term incentive plan award, but with weakened performance targets.

The group, which holds its annual meeting on Tuesday, is now proposing an earnings per share target of between 4% and 12% following pressure from the ABI, which has recommended that shareholders do not oppose the plans, giving the group’s annual report a so-called “blue top” rating.

A spokesman for the ABI said: “We have had a constructive and positive dialogue with the company over their proposals, which as a result have led to more demanding performance targets than were originally being considered.

“Our members have indicated that they are supportive of the proposals which should ensure sustained high performance for full vesting.”

An M&S spokesperson said: “It’s evidence that we do talk to shareholders and consult with investors and take on board their concerns.”

The ABI added that while the company’s annual report included some “higher than average” salaries for its executives, these were deemed reasonable in view of Marks & Spencer’s strong recent performance.