Marks and Spencer's boss was paid as much as £1.06 million after ongoing cyberattacks caused shares of British retailers to fall by more than ten.
Stuart Machin was appointed CEO in 2022 and expected to lose about £831,000 in Performance Stock Plans and £233,000 in the deferred bonus issued the same year and in July. Both have been affected by a 14% drop in M&S shares since the hack was disclosed on April 22.
As of Friday, the decline in shares had cut the prizes to £5.06 million and £1.42 million.
Macchin also lost about £1.4 million from his remaining stocks under the long-term incentive scheme and deferred bonuses, which could put his potential hit rate to about £2.4 million.
The FTSE 100 team said Tuesday that some individual customer data were stolen as part of the cyber attack that prevented them from accepting online orders within three weeks and resulted in empty shelves in some stores.
As the cyber attack occurs after the company's fiscal year ends, retailers are expected to release strong annual results, so Machin should not be hit for the year to March 31.
However, according to two senior compensation advisers, board members can exercise discretion to award bonuses under a cyberattack. They added that this year’s bonuses and long-term results could be hit after the first quarter of M&S are challenging.
"The compensation committee should probably signal that they will use discretion to lead the consequences," said Thomas Bolger, senior management analyst at Minerva-Manifest, who advised shareholders.
"We are more likely to see their announcement next year when they report on the financial year for cybersecurity attacks."
M&S said Machin's compensation is "always based on the realization of company goals and financial performance" and that "most benefits are long-term and their value will always reflect the stock price."
Those close to executives say he is not driven by his compensation plan and his focus is on restoring the fate of retailers.
However, the chaos in recent weeks may have disrupted the turnaround of his plan.
The company reported full-year results on Wednesday and is expected to update the consequences of hackers.
Analysts predicted that pre-tax profits increased by 17% for the year as of March 31. But “this year could be a strong start (this year), and there is no doubt that cyber attacks on Easter will be covered up,” said Kate Calvert of Investec.
M&S sales rose 14.7% year-on-year in the 12 weeks ending April 19, according to Nielseniq.
Clive Black, a retail analyst at Shore Capital, said: "It's clear that this has a serious impact on the performance in the first quarter - hundreds of millions of pounds - which by definition has had a significant impact on full-year results for 2026."
Analysts say M&S may have lost total revenue to date, totaling more than £75 million, based on its inferences from its average daily online sales that could climb to about £125 million if online operations are not restarted by the end of this month.
The attack on its system also made M&S work to keep the shelves stored in certain food stores, with the estimated weekly loss of sales of approximately £15 million.
"Some people won't go to M&S because they think the supply doesn't exist," he added. "The glorious weather over the past seven weeks will mean that M&S will be very upset about last month."
In addition to the loss of sales, retailers have to draft in consultants as some systems are shut down, and labor costs may also increase to help them resume their operations.
The Financial Times reported this week that M&S may claim losses from its online insurance companies up to £100 million.
Calvert said that while the management team is rightly focused on keeping the business running, the city will be eager to understand the impact on the broader transformation of the business next week.
Analysts at Morgan Stanley responded to these views, saying in a note this week: “The biggest risk is that if the interruption slows down the pace of the M&S’ medium-term transformation.”
The key part of M&S’ next phase is after successfully modernizing its scope and store and exiting the unprofitable website, based on improvements to improve backend operations such as increasing automation in its distribution centers and a better shopping application (a area that has been broken).
"They have gone from a highly automated, really self-improvement platform to a manual platform," said Shore Capital's Black.
Nevertheless, he believes M&S' performance in the 2024-2025 fiscal year should be the benchmark for future results, not the year because of the damage it suffered with the exchanges of cybercriminals.
“They had an absolutely wonderful year in market share in food and clothing before the attack.