Marks & Spencer’s (M&S) CEO, Stuart Machin, saw his annual compensation rise to £7 million, a significant increase from the previous year’s £5 million. This surge is primarily attributed to share awards earned by meeting performance targets, including profit growth.
However, this substantial increase comes amidst a significant challenge. A major cyberattack in April is projected to slash profits by £300 million.
M&S’s remuneration committee acknowledged the cyber incident when determining performance-related pay, ultimately deciding against adjustments. They stated, however, that the matter would be revisited during next year’s compensation review.
While insurance is expected to partially offset the financial impact, disruptions to online services are anticipated to persist into July. Mr. Machin’s compensation breakdown includes a modest salary increase to £843,000, a £100,000 bonus increase to £1.6 million, pension contributions, and a significant rise in share awards from £2.6 million to £4.5 million.
The Easter weekend attack initially compromised click-and-collect and contactless payments, later resulting in a complete suspension of online ordering. M&S Chairman Archie Norman anticipates lingering effects “for some weeks, or even months,” while expressing confidence in long-term growth.
Law enforcement is investigating the Scattered Spider hacking group, suspected of involvement in similar attacks on the Co-op and Harrods. Appointed just under three years ago, Mr. Machin initiated a “reshaping for growth” plan including £500 million in cost reductions. In response to the attack, M&S is accelerating its digital transformation and bolstering cyber defenses.
The retailer has confirmed the breach originated through a third-party vendor, although the identity remains undisclosed. While the website is now accessible for browsing, online ordering remains suspended. The National Crime Agency is actively pursuing the perpetrators of the M&S and Co-op hacks, leaving customers without online ordering capabilities for nearly a month.
The ongoing disruption highlights the significant challenges facing M&S, encompassing both operational and reputational impacts.