No M&S bonus after fall in profits

Tuesday 20 May 2014

Bosses and staff at Marks and Spencer will receive no bonus this year after profits fell for a third year in a row, piling pressure on chief executive Marc Bolland.

Mr Bolland will miss out for the first time since taking over in 2010, having received a cash and shares bonus worth £829,000 last year to take his full package to £2.1 million.

A discretionary bonus package for thousands of workers across the company will also not be paid. It comes after underlying pre-tax profits for the year to the end of March fell 3.9% to £623 million, their lowest level since 2009.

Promotions and markdowns as M&S battled for sales over Christmas ate away at margins during a year when the general merchandise (GM) division - including clothing - saw like-for-like sales fall 1.4%, though food improved 1.7%.

Mr Bolland has been under pressure as the retailer's performance stuttered despite turnaround efforts including a £2.3 billion investment drive over the last three years, the hiring of new fashion executives and a celebrity-driven marketing push.

He said: "No bonuses will be paid out to the whole company. There are no bonuses this year."

The announcement will apply to all M&S employees from the boardroom to the shopfloor. The group employs 82,000 people around the world. The last time that a discretionary bonus for shop floor staff at M&S was not paid was in the 2008/9 financial year, a period covering the height of the recession when underlying pre-tax profits fell to £604.4 million.

Last year, full-time shop floor staff received £215 each. Marks employs 75,000 staff in the UK, including 65,000 customer service assistants. Bonuses were paid out to six members of the board last year totalling more than £3 million, with Mr Bolland receiving the highest sum followed by John Dixon, executive director of the struggling GM division. He received £546,000, taking his total annual pay to £1.3 million.

Directors will receive no bonuses this year because the company failed to meet performance targets including pre-tax profits.

Board members also received no additional pay-out in 2007/8 despite profits of more than £1 billion, as targets were missed. But bonuses did go to staff that year.