M&S top staff must beat rivals to get full bonus

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The Independent Online

Marks & Spencer is to give senior managers free shares under a long-term bonus scheme that assesses the retailer's performance against rivals ranging from Next to MFI.

Marks & Spencer is to give senior managers free shares under a long-term bonus scheme that assesses the retailer's performance against rivals ranging from Next to MFI.

From next year, 30 top staff will be obliged to spend between one-third and all of their annual bonus award on M&S shares. Depending on the company's performance in the subsequent three years, the company will then make an award of up to 2.5 times the number of shares originally purchased. The maximum award will be made only if the company's total shareholder return – the performance of its shares assuming dividends are reinvested – ranks in the top two among 20 peers, and in the top 10 among FTSE 100 companies.

The peer group includes Arcadia, Big Food Group, Boots, Debenhams, Dixons, GUS, House of Fraser, Kingfisher, Matalan, William Morrison, New Look, Safeway, Sainsbury's, Somerfield, Tesco, WH Smith and Woolworths.

There are no absolute performance conditions attached to the scheme, implying that directors could be rewarded even if the M&S shares declined over a three-year period, so long as other companies' shares fared worse. M&S said the criteria were "challenging".

Some directors are to participate voluntarily in the plan this year if it won shareholder backing at the annual meeting. While initial membership of the scheme is restricted, the company expects to make all employees eligible.

Last year, M&S paid some £60m in staff bonuses, including £2.9m to directors of the company.

Luc Vandevelde, the chairman and chief executive, received a £1.36m bonus last year, comprising 100 per cent of his £654,000 basic salary and a deferred bonus, which included £352,000 of shares. His total pay, including benefits, was £2.2m, up from £834m.

Roger Holmes, the former Kingfisher executive now managing director of M&S's retail business, was paid £914,000, including a £431,000 bonus.

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