Marks and Spencer's directors missed out on an additional bonus payment last year after a key profitability target was not met, meaning that its Chief Executive Officer's (CEO's) total pay was more than halved.
Under M&S rules, all executive directors have group profit before tax (PBT) targets tied to their bonuses, the High Street retailer explained in its annual financial report released on Thursday.
"For there to be any payment under the group PBT measure in 2011/12, there was a requirement not only for year-on-year group PBT growth but also outperformance of the operating plan," the statement said.
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M&S said that its underlying PBT of £705.9m, down 1% year-on-year, did not meet the 'minimum' target, resulting in no bonus payment under the group PBT element (which accounts for 60% of the directors' total bonus).
For this element of the bonus, if the group was to outperform these targets then each director could have been in for payout worth up to 120% of their basic salaries; instead, they received nothing.
Nevertheless, it wasn't all doom and gloom for the directors though, as the remaining 40% of their bonus potential was tied to other "individual objectives". These still saw CEO Marc Bolland net himself £663,000 in bonus pay - equal to 68% of his basic salary of £975,000. Half of the bonus earned is paid in cash while half is deferred into shares.
When combining 50% of Bolland's bonus, his basic salary and other benefits (such as pension supplement, car allowances and dividend payments), his total remuneration in respect of the year ended March 31st 2012 totalled £1.68m. This was well under the £4.38m he got paid the year before.
Total pay for executive directors at M&S totalled £7.80m compared with £8.48m the previous year.
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