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M&S warned over remuneration report and finances

Thu, 2010-07-08

New Statesman

Marks & Spencer has been warned that it could be forced into a £2bn property sell-off or a cash call to bolster its finances, amid news of a potential shareholder revolt next week over its remuneration report.

Despite beating market expectations and reporting a third consecutive rise in sales this year, ratings agency Standard & Poor's has downgraded the chain to "sell", telling clients that the retailer is less well positioned to absorb additional pricing pressures, reports The Times.

The report also cites an RBS analyst who predicted that M&S will have to sell assets or float shares to reduce its £2.1bn debt and fix its pension deficit. However, some other brokers believe the current problems can be solved and have retained the chain's "buy" rating.

Meanwhile, the corporate governance advisory body Pirc has urged M&S shareholders to oppose the remuneration report presented by the retailer, whose executive pay it considered "highly excessive".

The company's AGM, scheduled for 14 July, is likely to see strong disagreements over the potential grant of a variable remuneration of 650 per cent of basic salary to executives, and the £15m pay package awarded to the new CEO, Marc Bolland.