Marks and Spencer investors have been urged to oppose the UK retailer’s remuneration report at its annual shareholder meeting next week by governance body Pirc.
The corporate governance advisory body said it considers the retailer’s executive pay to be “highly excessive”.
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The firm highlighted the potential of the M&S remuneration committee to grant a variable remuneration of 650% of base salary to certain executives.
It also highlighted the GBP15m (US$22.6m) pay package awarded to Marc Bolland, M&S’s new chief executive who announced his departure from Morrison’s last year.
Pirc said it is “concerned” about the size of the recruitment incentives Marks and Spencer is offering.
“The company is granting payments for potential future awards due to vest in 2010 and 2011 if Bolland had continued in his previous position,” Pirc said. “We believe that all of these awards should be subject to stringent performance conditions and should all be awarded in shares instead of cash.
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By GlobalData“We consider that this practice is not in the company’s long term interest as it contributes to a general tendency to grant such replacement awards, which devalues the retentive effect of long term incentive schemes. In addition there is no claw back provision attached to these incentives. We recommend shareholders oppose the remuneration report,” the advisory body added.
However, a spokesperson for Marks and Spencer told just-food: “Pirc is entitled to its views. It’s not one that we agree with and it’s up to shareholders to vote at the annual meeting next week.”
