A £15m golden hello

One of the most famous names on the High Street — Marks and Spencer or M&S — has brandished its cheque book to get its new chief executive. Marc Bolland moves from supermarket group Morrisons to M&S from 1 May.

Bolland’s remuneration package will comprise a £975,000 salary, annual bonus potential of up to 250% of salary (or £2.44 million) and an annual award of shares under the company’s performance share plan. In 2010-11, this award will be an exceptional award worth 400% of salary or £3.9 million.

Additionally, M&S is to compensate Bolland for a number of share awards forfeited by his departure from Morrisons. This comprises £1.6 million in cash and £1 million worth of shares to compensate for loss of bonus and shares that would have vested in 2010; and a restricted share award worth £1 million and a performance share plan worth £3.9 million to compensate for shares that he would have received in 2011 and 2012. In total the whole pay and share package comes to £14.8 million.

Such a huge golden hello has come under attack. Tom Powdrill of PIRC, which advises shareholders on corporate governance issues, said: “We are opposed to this sort of golden hello. It distorts the market 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.”

http://corporate.marksandspencer.com/investors/press_releases/company/MarcBolland

www.guardian.co.uk/business/2010/feb/01/marks-spencer-marc-bolland-pay1