The UK's Pensions & Investments Research Consultants is urging shareholders to vote against the reappointment of two Marks & Spencer directors.
PIRC claims the directors have failed to comply adequately with the combined code for corporate governance.
PIRC's report to its clients – which include pension funds and investment managers with combined assets of over £350bn – calls on shareholders to oppose the election of non-executive directors Tony Ball, chief executive of BSkyB, and Kevin Lomax, executive chairman of software group Misys. They are also members of the remuneration committee.
PIRC points out that M&S has not provided any opportunity for shareholders to vote on the remuneration report, lacks disclosure of past and current annual bonus targets and has inadequate share incentive targets in place.
M&S is also seeking shareholder approval to amend the executive share option scheme increase which could see senior employees earn up to three times their annual salary compared with the previous cap of one-and-a-half times.
PIRC has advised shareholders to vote against the approval of the scheme at the retail giant's annual meeting on July 11 because “performance targets are not being increased commensurately”.
PIRC research director Stuart Bell said: “The prime job of the remuneration committee is to look after the shareholders’ interests and to provide full information to shareholders to satisfy them that they are putting in place transparent and effective incentive structures. There is no transparency here and effectiveness is open to question.”
PIRC advises institutional investors on corporate governance and corporate responsibility issues.
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