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ANNUAL BONUS SCHEME
ANNUAL BONUS SCHEME 2015/16 (audited)
Annual performance for 2015/16 was
measured against Underlying PBT (30% of
awards) and either business unit operating
profi t for trading directors or free cash fl ow
for the CEO and CFO (30% of awards).
Individual performance accounted for
40% of bonus opportunity, with objectives
aligned to the relevant key strategic
business priorities. Figure 12 provides
an overview of the key achievements
against objectives.
Steve Rowe’s measures were amended to
refl ect his change in accountabilities in
July 2015 from Food to Clothing & Home.
His pro-rated performance for each
business area is refl ected in his fi nal
bonus payment.
Underlying PBT outturn was £684m which
was above the £680m target set to trigger
payments under both the corporate and
individual elements of the Scheme.
The Committee reviewed all of the bonus
outcomes in the context of the Company’s
overall performance and quality of
earnings. With regard to free cash fl ow, the
Committee judged it appropriate to adjust
downwards the actual bonus outturn fi gure
to refl ect certain items such as project
delays which the Committee felt should
not be refl ected in the bonus payment.
As a result, payments under this element
were 18.2% of bonus as shown in Figure 13.
The Committee also reviewed achievement
to ensure that total payments were
appropriate in the context of M&S’s overall
performance and outturn of individual
objectives. Taking into account overall
Company performance and balance of
the team, the Committee determined
that the bonus for the CEO be subject
to a discretionary downward adjustment
of 20% (from c. 80% to c. 64% of salary).
Bonus payments awarded to the executive
team are shown below. We are satisfi ed that
the payments to the CEO, the executive
directors and elsewhere in the business are
fair and balanced in the context of overall
Company performance.
Success towards Plan A targets and M&S
Values underpinned the entire Scheme.
The Committee was satisfi ed that each
director continued to ensure that Plan A
and leadership in embedding M&S’s cultural
values remained a major focus of the ways
of working and that the performance
supported this.
See Plan A Report for more detail.
The Committee ensures that targets set
are the relevant drivers of required annual
performance. Some of the 2015/16 targets
are too commercially sensitive to disclose
as they are not disclosed elsewhere in
this report. M&S remains committed to
transparent reporting within the context of
operating in a highly-competitive market.
The Committee will continue to assess the
commercial sensitivity of targets with the
aim to disclose wherever possible, while
ensuring that any measures set are those
most appropriate to grow the business.
60
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
REMUNERATION REPORT
CONTINUED
EXECUTIVE DIRECTORS’ REMUNERATION CONTINUED
FIGURE 13: ANNUAL BONUS SCHEME 2015/16
Director
CORPORATE
TARGETS
INDIVIDUAL
OBJECTIVES
TOTAL
PAYMENT
UNDERLYING
GROUP PBT FREE CASH FLOW2
BUSINESS
UNIT PROFIT
Performance AchievementTarget/performance Achievement Target/performance Achievement Performance Achievement
Min
£m
Max
£m
Actual
£m
% max
bonus
Min
£m
Max
£m
Actual
£m
% max
bonus
% max
bonus
% max
bonus
%
salary £000
Marc
Bolland
680 735 684 5.9 489 589 546 18.2 – – 16.0 63.8 622
Patrick
Bousquet-Chavanne
680 735 684 5.9 – – ––0.0 27.6 67.0 366
Steve
Rowe
680 735 684 5.9 – – ––4.8 10.0 41.4 230
Laura
Wade-Gery1
680 735 684 5.9 – – ––0.0 33.6 79.0 207
Helen
Weir
680 735 684 5.9 489 589 546 18.2 – – 28.4 105.0 620
1. Laura Wade-Gery’s bonus payment refl ects her period of maternity leave which began on 22 August 2015.
2. Targets and achievement exclude shareholder returns and pre acquisition of the subsidiary.
Performance assessment key
FIGURE 12: KEY ACHIEVEMENTS OF INDIVIDUAL OBJECTIVES 2015/16
Marc Bolland Continued improvement in UK Food sales and embedding
‘Fit To Lead The Future’ through talent development and recognition
Patrick Bousquet-Chavanne Successful launch of ‘Sparks’ and inspirational marketing
campaigns to drive store and online footfall
Steve Rowe Continued improvement in UK Food sales and driving
change in Clothing & Home
Laura Wade-Gery Signifi cant improvements in the stability and performance of
Donington and increased customer satisfaction in stores and online
Helen Weir Robust control of business costs and successful delivery of
Clothing & Home supply change transformation project
Below
Threshold Target > Stretch
Threshold > Target
Above
stretch