M&S Execs See Slim Reward From Share Scheme

Scores of top executives at Marks & Spencer (Other OTC: MAKSF - news) (M&S) will receive only a tiny payout from an incentive scheme despite producing the retailer's first rise in annual profits in four years.

Sky News can reveal that scores of senior managers, including M&S's chief executive Marc Bolland, were informed this week that the company's 2012 Performance Share Plan (PSP) will hand them just 4.7% of the maximum possible share awards.

The meagre return comes just days after M&S announced that full-year profits for 2014-15 rose by 6.1% to £661m.

That performance is likely to mean that Mr Bolland and other executives will receive a bonus for last year, with 60% of their annual incentive derived from the company hitting a range of proftability thresholds, according to people close to the company.

M&S's 2012 PSP, payouts from which are based on its performance over three years, yielded an even lower return for participants than the previous year's scheme, which awarded 7.6% of the maximum shares to executives.

Half of the long-term share scheme is weighted towards an earnings per share target of 110p, which M&S missed, recording a final performance of 99.7p.

A further 30% is predicated on meeting revenue targets of £8.9bn for its UK business; £800m in multi-channel; and £1.3bn across its international operations.

According to documents sent to participants this week, M&S failed to hit all three targets, with the UK recording sales of £847bn, multi-channel £776m and international £1.065bn.

The only element of the scheme which triggered an award to participants was one relating to return on capital employed, which narrowly beat a 15% target.

One M&S executive said the 4.7% payout illustrated the robustness of the targets set by the company's remuneration committee.

The retailer said last week that it would spend £150m buying back shares following its profit increase, the first incremental return of capital since 2007, when M&S was run by Lord Rose, Mr Bolland's predecessor.

Two employees who are expected to enjoy a more lavish payday are Mark and Neal Lindsey, brothers who were recruited to improve the efficiency of M&S's supply chain.

Sky News revealed last month that the pair are expected to receive a multimillion pound share payout after a significant improvement in M&S's gross margin in its general merchandise operations.

An M&S spokeswoman declined to comment on any share awards beyond saying that full details of the company's remuneration decisions would be disclosed in its annual report in the coming weeks.