This largely affects chief executive Steve Rowe and finance director Eoin Tonge, whose awards have now been lowered from 250% to an intended 175% of their salary.
It comes after the retailer’s committee said it recognised that the “material fall” in share price since awards were made in 2019, and took “decisive action” to significantly reduce Performance Share Plan (PSP) awards.
In determining the size of this year’s PSP awards, the committee acknowledged the shareholder experience of Covid-19 to reduce windfall gains from directors’ awards. As such, M&S’s average share price since February 2020 until mid-May was used as a reference point in Committee discussions.
M&S added that the performance targets for this award will be set at a time when the impact of Covid-19 on the business can be better forecast, and the proposed strategic measures reviewed in light of the business’s strategic response to the post-pandemic trading environment.
Last month, Marks and Spencer revealed that its profit before tax tumbled 20.2% to £67.2m in the full-year ended 28 March 2020.
The retailer’s full-year grocery sales improved 1.9%, with an estimated 0.3% lift attributable to the pandemic. However, clothing and home revenue declined 8.3% overall, with like-for-like revenue down 6.2% in the period, including an estimated 2.2% adverse impact from the acceleration of Covid-19 in March.
Clothing trading was also affected by availability and “teething” issues, according to the retailer, though performance in this department was “encouraging” towards the end of the year, prior to the effects of Covid-19.
Overall, the group’s total annual revenues fell 1.9% to £10.18bn in the full-year period.