M&S defends its executive pay as UK sales surge in first quarter

Sir Stuart Rose, the chairman of Marks & Spencer, boasted yesterday that its resolution on executive pay would be passed by investors at its annual meeting next week, after the retailer reported that clothing sales had soared ahead of expectations.

M&S could face a protest from shareholders in London next Wednesday after Pirc, the corporate governance body, urged them to vote against its remuneration report and its "highly excessive" executive pay. In particular, Pirc highlighted the potential for the M&S to grant a variable remuneration of 650 per cent of base salary.

It also cited the potential £14.8m that Marc Bolland, who became the chief executive of M&S in May, could earn in his first year, although half of this relates to compensation for bonuses accrued at Morrisons. However, Sir Stuart said: "I am very confident that all the resolutions will be passed and we can move on to a new place."

He also launched a vigorous defence of Mr Bolland's pay, saying: "If you pay peanuts, you get monkeys".

The chairman added that only Mr Bolland's pension and salary were guaranteed and the rest of his package – excluding the compensation from Morrisons – was related to performance.

Sir Stuart, who will step down by March 2011, has faced criticism for the £875,000 salary he gets from the end of this month when he becomes non-executive chairman.

He said: "I am working pretty extensively. I don't turn up two days a week. I am in the office five days a week and I am available seven days a week." Shareholder anger at executive pay in the UK is growing. Last week, only 53 per cent of investors' votes were cast in favour of Tesco's remuneration report. But the mood at M&S's annual meeting in the Royal Festival Hall will be helped by the high street giant's strong first-quarter performance.

Its total UK sales jumped by 4.8 per cent, although its international sales rose by only 0.9 per cent, hit by "difficult trading" in Ireland and Greece and an adverse impact from currencies.

Its closely-followed UK like-for-like sales, including online, jumped by 3.6 per cent over the 13 weeks to 3 July. The star performer was its general merchandise division, which grew underlying sales by 6 per cent. Sales of its Per Una brand were particularly strong, both in-store and online.

Mr Bolland said: "We have grown market share across all areas of the business." It grew its share of the womenswear market, based on sales value, by 50 basis points to 10.4 per cent – an identical rise and market share in menswear – as well as a 90 basis points jump in lingerie to 26.7 per cent.

Mr Bolland pointed out the uplift in lingerie sales came despite strong sales for the same period last year, when it ran its "We boobed" advertisements after ditching its policy of charging woman an extra £2 for bigger bras.

While England had a miserable World Cup, M&S benefited by selling 7,000 of the grey suits it provided to the national football team. This was despite the Arsenal star Theo Walcott, who appeared in the retailer's high-profile billboard campaign, not being selected for the final squad.

UK underlying food sales at M&S rose by 1.5 per cent, as the improvement under John Dixon, the executive director of food, continues.

But Mr Bolland warned on the outlook for the high street. "We have made a good start to the financial year, but following the recent Budget and the actions proposed to reduce the national deficit, including the increase in VAT, we are cautious about the outlook for consumer confidence and spending."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003