Marks & Spencer’s new clothing chief Jill McDonald will miss out on £1.7m of bonuses after stepping down from her current role as boss of Halfords.
McDonald, who revealed in May that she was quitting the cycling and car-parts business to take on one of the toughest jobs in retail, saw her total pay slip by just over £110,000 to £741,412 during Halfords’ financial year.
M&S’s incoming managing director of clothing, home and beauty had been in line to receive around £255,000 in bonuses from Halfords this year.
She has also forgone a potential £1.16m in long-term bonus share awards, stretching to 2019, as well as approximately £260,000 in compensation for missed bonuses at her previous employer McDonald’s.
However, McDonald is set to receive payments or buyout awards from M&S to make up for those missed bonuses, as per the retailer’s policy with new recruits.
M&S’s annual report states: “Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous employer as a result of appointment, the [company] may offer compensatory payments or buy-out awards, dependent on the individual circumstances of recruitment, determined on a case-by-case basis.”
The appointment of McDonald, who has never worked in fashion, raised a few eyebrows in the City when news of the move was revealed in May.
She began her career with health and beauty group Colgate-Palmolive before spending 16 years at British Airways, eventually becoming head of global marketing before joining fast-food giant McDonald’s in 2006.
McDonald replaced Matt Davies – now Tesco’s UK boss – at Halfords in May 2015, but will now face perhaps her toughest test yet in attempting to turn around M&S’ struggling clothing arm.
Marks & Spencer suffered a 63.9% slump in profit to £176.4m during the 52 weeks to April 1.
Like-for-like sales in its clothing and home division fell 3.4% across the full year and 5.9% in its fourth quarter.
Chief executive Steve Rowe and new chairman Archie Norman have made the embattled category a priority in their efforts to transform the high-street bellwether’s fortunes.