Bolland's deal: M&S fails to learn the disclosure lesson

There has been much press comment regarding the pay package of Marc Bolland, the new Marks & Spencer (M&S) CEO. M&S has been no stranger to press and investor attention in recent times. In particular, the decision to combine the roles of Chairman and CEO in 2008 attracted criticism for the failure to provide a sufficiently timely and meaningful justification.

Three key questions are raised by the announcement and associated press speculation about Bolland’s deal.

1. Where is the accompanying explanation for the use of discretion in allowing ‘exceptional’ levels of award?
2. How did the Remuneration Committee approve aggregate awards under the Performance Share Plan of some 800% of salary (exceptional 400% + further £3.9m to compensate for past awards), when the ‘exceptional circumstances’ limit is 400% of salary.
3. Would the press (as it’s mainly the press commenting) prefer that M&S accept second-best?

1. Accompanying Explanations?

The M&S announcement (01-Feb) provided an outline of Bolland’s remuneration package offering plenty of headline figures for the press to interpret (or, in some cases, mis-interpret).

Unfortunately for the M&S press department, there were no details of the performance conditions or vesting periods that would apply for any of the performance-based pay and no explanations for the special recruitment-related awards. It seems that the lessons from the 2008 announcement of the combination of CEO and Chairman roles in Stuart Rose have not been learned.

So what explanations should have been there?