View from City Road: Full Marks for shareholder value

Top pay is usually a one-way racket, going up every year whatever happens to profits. But while other chief executives do not see falling profits as a bar to rising bonuses, Sir Richard Greenbury, executive chairman of Marks & Spencer, has had his bonus cut from pounds 126,506 to pounds 59,350, despite a performance that puts most high street rivals to shame.

True, he was compensated with a 5.9 per cent rise in salary to pounds 629,588 and pounds 4,750 extra went into his pension scheme. But that still left him pounds 27,438 worse off, with a total package of pounds 779,188.

That still makes him the fourth- highest paid retail boss (although his company is by far the most profitable) and, at about pounds 15,000 a week, it is more than many of his shop assistants will earn in a year. But, using Sir Richard's yardstick of value for money, it humbles his rivals. Marks' profits rose 15.6 per cent to pounds 851.5m - almost pounds 1,100 of profit per pound of salary. Compare that with the top three in the retail salary league.

Sir Geoff Mulcahy, chairman of Kingfisher, runs a company that makes less than pounds 300 profit for every pound of his pounds 1,050,000 salary - up 36 per cent last year, even excluding the pension top-up; Sir Alistair Grant, of Argyll, had an 80 per cent rise in salary to pounds 986,000 (despite a 13 per cent fall in profits) and earned just pounds 257 corporate profits for every pound; Sir Ian MacLaurin of Tesco, after a 22 per cent drop in salary to pounds 794,000, still makes less than half Sir Richard's profit per pound earned.

Marks' was no more willing than any other company to reveal details of its bonus scheme, confining itself to vague comments about performance targets.

But at least it is prepared to accept that bonuses can go down as well as up, just like share prices. Marks appears ready to offer value for money to its shareholders as well as to its customers.