M&S chiefs get pounds 5.4m in options

Sir Richard Greenbury and his executive directors at Marks & Spencer were last month granted options on shares worth almost pounds 5.4m at yesterday's market price, it emerged last night.

Unearthing of the awards, part of a total pay package, comes just days before Sir Richard is due to present his Government-backed report on boardroom pay.

It is understood the Greenbury committee will not attack the concept of share options but is likely to recommend that they are linked much more closely to performance targets. Last month's options for many of the M & S board were unrelated to performance.

But under the rules of the company's scheme the directors are unable to cash in their grants for three years.

A spokesman for Marks & Spencer said: "We have a policy of keeping up with best practice. The Greenbury Committee report has not been published yet. When it is we will act on it. The company's remuneration policy is fully disclosed in the annual report, including details of the share option schemes. In terms of current best practice the report is as up to date as it can be."

The options granted to Marks & Spencer's 17 directors are already showing a pounds 337,268 paper profit. The news comes hard on the heels of British Airways announcement on Tuesday that it is to scrap its share option scheme. Sir Richard received his grant of 121,432 options at 414p per share on 19 June. At that price, the shares over which he has options are worth a little over pounds 502,000.

With the recent increase in the price of Marks & Spencer shares, Sir Richard has made a paper profit of pounds 24,286 in less than a month.

The grants awarded to other directors were spread over the month of June. Keith Oates, deputy chairman and joint managing director, was granted 157,487 options on 5 June. His shares are worth in excess of pounds 650,000 at the grant price of 414p, and are showing pounds 31,497 paper profit.

Each of the other joint managing directors have also received substantial grants of options. Guy McCracken, who is responsible for foods, Andrew Stone, responsible for general merchandise and Peter Salsbury, responsible for the groups properties, have each been awarded 125,602 options. The shares on which each man's options have been granted are worth pounds 519,000 at the grant price. They are now worth in excess of pounds 545,000, showing a paper profit of pounds 25,120. All the other executive directors have been granted options, bringing the total of options awarded to 1.2m worth just under pounds 5.4m.

Separately it emerged yesterday that the Greenbury Committee has come down in favour of taxing share options at the time they are exercised rather than waiting until they are sold at a profit. The recommendation will anger some companies which are already incensed at Greenbury's view that options should be liable to income rather than capital gains tax. The recommendations on share options, which are expected to be accepted by the Government, are being hailed as a victory by the Labour Party. Gordon Brown, Shadow Chancellor, said Government acceptance would be a "humiliating rebuff" for the Chancellor, Kenneth Clarke. Mr Brown also called on the Greenbury committee to be tougher on utilities than the rest of business. He launched an attack on water company chiefs who, he said, have share options which would today give them a pounds 24 million profit.Their boardroom pay bill had risen from pounds 2.1m to pounds 9.3m since privatisation, he said.