Marks & Spencer’s (M&S) chief executive’s total yearly pay package jumped to £7m, before a cyber attack knocked-out online orders, hit contactless payments, and disrupted stocks in stores.
Stuart Machin got the bump, from the previous year’s £5m total, mainly due to share awards from reaching performance targets including profit growth.
In this current year, however, a cyber attack on the retailer in April is expected to take a £300m bite out of profits.
The retailer’s remuneration committee said it had considered the “recent cyber incident” when deciding on performance-related pay and concluded that “no adjustments were needed”.
But it said it “recognised it would need to re-visit the matter” when deciding on next year’s compensation.
M&S expects insurance to cover some of the financial impact, but issues with its online services will continue into July.
According to M&S’s annual report, Mr Machin got a small rise in his basic salary to £843,000 in the year to March. His bonus grew by £100,000 to £1.6m. He also received a pension contribution.
But the amount he gained from share awards rose from £2.6m to £4.5m.
The attack took place over the Easter weekend and initially hit click-and-collect and contactless payments. Days later M&S put a banner on its website apologising that online ordering was not available.
In M&S’s annual report, chairman Archie Norman said the impact of the attack was likely to “endure for some weeks, or even months”.
However, he added: “I am confident that in a year’s time the cyber incident will prove to have been a bump in the road along the path to growth, even if it does not feel like that today.”
Police are investigating a group of English-speaking hackers, known as Scattered Spider. The same group is believed to have been behind attacks on the Co-op and Harrods.
Mr Machin was appointed M&S chief executive just under three years ago. Shortly after starting the top job, he revealed his “reshaping for growth” plans, which included £500m of “structural cost reductions”.
As part of the business overhaul, the company said on Monday it is “accelerating” its “digital transformation plans” to “reinforce our cyber defences and provide greater resilience in the event of a subsequent attack”.
