Former Marks & Spencer (M&S) CEO Sir Stuart Rose was awarded a bonus of £1.36 million last year, according to the retailer’s annual report published today.
Rose, who left the company in January having held the dual role of CEO & Executive Chairman for three years, saw his total annual pay - including bonuses - increase by £165,000 year-on-year to £2.77 million.
With M&S’s financial year ending on April 2nd it effectively means that the long-serving retail boss, who oversaw a dramatic increase in sales at the company during his six years in charge, was awarded a seven-figure sum for nine months’ work in his final year.
Much of his work was taken up ensuring there was a smooth leadership transition from him to new CEO Marc Bolland, who arrived from Morrisons in the spring of 2010.
Bolland himself made £4.38 million in his first 12 months at the helm, including a £409,000 cash bonus. Some 40 per cent of the bonus is paid in cash and 60 per cent is part of a deferred share bonus plan, which was paid out this month.
M&S said that total bonuses for its executive team were as follows; Bolland, £1.02 million; General Merchandising boss Kate Bostock, £646,050; Food director John Dixon, £618,300; Marketing Exec Steven Sharp, £717,225; and Finance Director Alan Stewart, £250,939.
The high street retailer also revealed today that it hopes to amend its remuneration policy so that it is more closely in line with Bolland’s business strategy, which he outlined in November last year.
Changes include a greater focus on long-term performance and the rebalancing of the annual bonus so that 60 per cent is based on underlying group profit and the remaining 40 per cent is determined by performance against quantifiable strategic measures.
Chairman of the Remuneration Committee Steven Halliday said in today’s report: “The committee believes that we have developed an incentive structure that will clearly support and motivate the team in a way that is aligned with the business strategy to deliver quality long-term growth for the business.
“We will be seeking shareholder approval for these amendments to the long-term incentive plan at the 2011 AGM.”
The issue of executive pay has been widely debated in the last few years, with Tesco also recently changing its remuneration policy following criticism of US boss Tim Mason receiving a multimillion pound bonus in 2010 despite the grocer’s American operation making significant losses during that financial period.
Today’s statement from M&S is further proof that some of the UK’s largest retailers are closely monitoring the level of reward offered to executive board members.