Marks & Spencer has faced criticism from shareholders over its decision to pay an annual dividend of just 3p per share, despite granting substantial bonuses to its executives.
At the retailer's recent annual meeting, several investors expressed disappointment with the "very low dividend payment," the first in four years, especially following M&S's better-than-expected profits. Archie Norman, the chairman, acknowledged that while the dividend was intended to provide shareholders with a modest return, he recognised it might seem inadequate. He emphasised the company's commitment to investing for growth, stating, "Our priority is to invest in our future."
Questions were also raised about why Stuart Machin, M&S's chief executive, received the largest pay package in a decade, totaling £4.7 million in fixed pay, bonuses, and other remuneration in the latest financial year, despite the modest dividend payout.
Norman defended the executive compensation, highlighting that M&S had faced years without bonuses previously, and now they could reward executives while reintroducing dividends. He underscored that a significant portion of bonuses and long-term incentives are deferred, emphasising accountability and aligning executive pay with long-term company performance.
Under Machin's leadership, alongside former co-chief executive Katie Bickerstaffe, M&S has embarked on a significant transformation. Efforts include improving the fashion appeal of its clothing division, enhancing its food offerings, modernising its stores, and rationalising its less profitable locations.
