M&S to face shareholder pressure over low pay

Major high street retailers, including M&S, are set to face pressure from shareholders over low pay in their workforce, including third-party contractors.

ShareAction, which campaigns for responsible investment, has put forward resolutions on the issue, which will be voted on by shareholders at M&S' annual general meeting (AGM) on Tuesday.

The company is facing questions over wages that do not meet the “real living wage” of £12.60 per hour nationally and £13.85 per hour in London for those aged 21 and over.

These wages, which are set by the Living Wage Foundation to reflect the true cost of living, exceed the 2025/26 legal minimum wage of £12.21 set for the whole country, including London.

ShareAction argues the real living wage boosts stability, productivity and brand value, and has long been campaigning on the issue across the retail sector.

Catherine Howarth, Chief Executive at ShareAction, said: "We urge investors to support the shareholder resolutions going to a vote at the AGMs of M&S and JD Sports. Votes in support will endorse good governance and risk management whilst recognising the workers who keep these businesses running."

The resolution asks M&S to disclose information on the number of employees earning below the real living wage and staff turnover rates, as well as their approach to setting base pay for contracted staff and a cost/benefit analysis of setting the real living wage across their workforce.

While M&S pays direct employees at least the real living wage, it argues that third-party contractors are independent and set their own pay.

M&S’s board is recommending shareholders oppose the resolution, citing its recent investments in employee compensation of more than £285 million since 2022 and an increase to the standard hourly rate by more than 26%.

On third-party contractors, it also said the vast majority of colleagues are paid at or above the real living wage.

At the AGM, M&S could also be questioned about the major cyber attack it suffered earlier this year, which halted website orders, disrupted contactless payments, left some shelves empty and saw personal customer data taken by hackers.

The company said the incident is likely to drag its group operating profits down by around £300 million this year, but it expects this to be reduced through cost management, insurance and other reactions.

Pensions & Investment Research Consultants (PIRC), which is Europe’s largest independent shareholder advisory consultancy, is supporting the resolution at the AGM.

PIRC said that while M&S has made progress on pay, there is still room to improve in formally committing to wage standards and increasing transparency for contractor pay.

It follows an identical resolution filed at NEXT in May, which gained the support of over a quarter of shareholders.

While not legally binding, support for shareholder resolutions can put pressure on business leaders to respond to the matters raised, and more than 20% of dissent against the board can be considered a rebellion.

An M&S spokesperson said: "In addition to paying the real living wage, we offer an industry-leading range of benefits which, when taken with hourly pay, is worth up to £15.40 an hour.

"In regards to on-site third party contractors, which we use for specialist roles and to support the inherent seasonality in retail, a vast proportion of colleagues are paid at or above the real living wage and we go to great lengths to ensure they are all treated as part of the M&S family.

"While we support and act on the principle that all M&S-related colleagues should be paid well, we do not believe it is right to divest responsibility for setting pay and benefits away from businesses and their shareholders to a third party, as ShareAction would propose."