Investors round on M&S over executive pay-offs

Shareholders rounded on Marks & Spencer yesterday, criticising it for the scale of the payouts awarded to the executive casualties of Philip Green's potential £9bn takeover bid.

Shareholders rounded on Marks & Spencer yesterday, criticising it for the scale of the payouts awarded to the executive casualties of Philip Green's potential £9bn takeover bid.

A leading corporate governance lobby group called on M&S to justify its decision to allow Luc Vandevelde, the former chairman, and Roger Holmes, the chief executive, to exercise their existing share options, worth some £6.5m.

Pirc, which advises the pensions industry, has asked M&S to spell out what financial targets it set the duo, neither of whom received a bonus last year. It said M&S had yet to respond.

"Compensation payments have been a feature of M&S's accounts in five of the last six years with the aggregate paid to departing directors totalling nearly £5m," Pirc said. "Perhaps Patricia Hewitt should consider instructing the DTI to attend the AGM next month as part of their ongoing monitoring of 'rewards for failure'." Isis Asset Management said it would question the company about the pay-offs, demanding reassurance that it had paid out the "legal minimum" in compensation. Vittorio Radice, the former clothing and homes boss, yesterday left the company after only 15 months with a total of £2.6m.

Shares in M&S rose 7p to 366p, hitting levels reached during the euphoria before Mr Green tabled his cash-and-shares proposal. Yesterday sources played down the prospect that Mr Green would return with a fresh bid early next week. The Arcadia and Bhs owner, who flew to his Monaco home yesterday afternoon, is expected to seek out more equity partners before tabling a new bid. One investment banker said: "If you conclude it has to be an all-cash bid of more than £4 [per share] to take-out M&S he needs a minimum of another £2bn of equity." Speculation has centred on the billionaire Reuben brothers, the property investors who were stalking Selfridges last year.