M&S defends Rowe bonus in face of significant investor revolt

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Marks & Spencer has defended its stance on director remuneration – including that of departing chief executive Steve Rowe – after a substantial proportion of investors opposed the package.

Steve Rowe

Steve Rowe left M&S after 37 years at the retailer

M&S “noted” that while the advisory on the directors’ remuneration report won 70.89% of votes at today’s AGM, 29.11% were cast against. Rowe, who stood down in May after overseeing a turnaround programme alongside chair Archie Norman, was awarded a £1.6m annual bonus as well as £1m in pay and benefits although he was working his notice when it was awarded.

M&S said it has been “proactively talking to our larger shareholders about this subject and we are aware of the reasons why some shareholders voted against the resolution on the remuneration report”.

However, it said the board “is convinced that the majority of shareholders were right in their judgement on this issue”.

M&S maintained: “The board strongly believes it has acted in shareholders’ interests and consistent with the values and integrity of the business in relation to Steve Rowe’s remuneration.

“Steve served 37 years with the business, the last six years as chief executive officer. Three weeks prior to the 2022 financial year-end, we announced that he would be standing down at the results announcement, as part of a planned succession process that he helped to plan, handing the leadership to a team that he recruited. He worked full time and with total energy as chief executive officer well beyond the end of the financial year.”

The retailer argued: “All eligible colleagues have received a bonus this year, the first since 2017, in recognition of the strong financial performance in the year. It would have been wholly wrong to exclude Steve from this as the performance was delivered under his leadership.

“To have denied him the bonus because he helped support an orderly and organised succession that was announced just three weeks before the year-end would have shown bad faith to a great servant of the business and would not have been in any way in shareholders’ interests.”

The retailer said it would “engage further with shareholders to understand the concerns expressed by the minority” and provide an update on that within six months.