Marks & Spencer faces shareholder concerns over its annual dividend of just 3p, despite paying millions of pounds to its top executives in bonuses.
At the retailer’s annual meeting, held on Tuesday evening, several investors expressed their disappointment at the “really low dividend payment,” the first in four years. This was after the retailer had exceeded its profit forecasts.
Archie Norman said that the dividend was intended to “put a little chink into people’s pockets” but acknowledged that it had been a modest return.
Archie Norman, Chairman of M&S said that his priority is “to invest in growth”.
He did not wish to sound like “Scrooge”, but he was “so aware that in the past 20 years , there were moments of light followed by moments of darkness again and we simply don’t want be there.” “Our priority is to invest in growth.”
Board members were then asked to explain why Stuart Machin was given the largest pay package the company has ever received in the last decade. He took home £4.7 million as fixed pay, bonuses, and remuneration for the most recent financial year. If more money couldn’t be paid out to shareholders. The remuneration reports was rejected by 4.7% of the attendees.
Norman said, “There were many years where we could not pay a bonus.” We are now at a point, and I believe we should celebrate, where we can give a bonus, and bring back the dividend.
He stressed that it is important to note that as part of the executive pay structure of the company, “a very high proportion of bonus and long-term incentive must be deferred.” Stuart and his team won’t receive that money in the same year.”
M&S is undergoing a transformation under Machin, the chief executive of M&S since 2022 and Katie Bickerstaffe its former co-chief executives. It has worked on improving its style credentials, its food offerings, and revamping its stores.
M&S’s bosses had to defend their store rotation program on Tuesday when shareholders questioned if the company was “giving up the high street” if it closed high street stores and town centres and instead invested in out of town retail parks.
Norman stated: “We never intended to leave city centres. It’s true that we need to relocate some stores because they are difficult to maintain. But it is not an out-of town-centre policy.
Machin stated that M&S “was not deliberately trying to leave the high street”
Machin stated: “The rotation of stores is a real catch-up program for the past 20 years. We have many stores that are in the wrong places and we can’t afford to renovate them. We know where growth will come from. “We’re not trying to leave the high street.”
M&S was also questioned about its struggling joint venture online grocery with Ocado. One shareholder asked whether its online food business could be “reimagined”.
Machin stated that he wasn’t “overly pleased” with the fact that Ocado Retail continues to lose money every year. However, he didn’t see another option for M&S to sell food online. “Our stores are up to 20,000-square-foot convenience stores and the economics won’t work. In many of these stores, you won’t find a complete range. “We think that the model of the customer fulfillment centre is the best model.”
Machin also said that the company changed its policy on post-retirement discounts for colleagues after discovering that 50,000 discount coupons were being used by people outside the company’s employee base. This was affecting the balance sheet. Former M&S employees will only receive a 20% discount after 25 years of service.
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