M&S CEO Stuart Machin to face over £1million pay cut following cyber attack

Marks & Spencer (M&S) CEO Stuart Machin is facing a potential pay cut of over £1 million in the wake of a cyber attack that has severely disrupted the retailer’s operations and caused a sharp decline in its stock value.

The cyber attack, which was disclosed Easter Weekend, has led to a 14% drop in M&S’s share price. This decline directly impacts Machin’s compensation, resulting in an estimated £831,000 loss from his performance share plan and a further £233,000 reduction in a deferred bonus, both due to be paid out in July.

The total potential hit to Machin’s compensation could reach £2.4 million, as he is also experiencing paper losses on shares held through long-term incentive plans. The attack, which is believed to have compromised both customer and staff data, has left M&S unable to process online orders for more than three weeks.

Clive Black, a retail analyst at Shore Capital, described the impact on online sales as significant, stating: “Online sales have suffered greatly. The disruption has cost M&S hundreds of millions in potential sales, and the full impact may not be clear until the next financial year.” Analysts estimate that M&S may have already lost over £75 million in sales, with the figure potentially rising to £125 million if online operations are not restored quickly.

While M&S anticipates reporting strong annual profits for the year ending March 31st, as the attack occurred after this period, the long-term repercussions of the cyber attack could lead to further scrutiny of Machin’s pay package. The company has stated that his compensation is “always based on the achievement of company objectives and financial performance.”

In addition to lost sales, M&S is also incurring substantial costs to address the cyberattack, including the expense of hiring external advisors to restore its systems. Although the retailer expects to claim up to £100 million from its cyber insurance policy, some analysts remain cautious, suggesting this may not fully cover the total damage.