Bonus cuts for retail bosses

The chief executives of Sainsbury’s and Marks & Spencer have both taken bonus cuts after failing to meet targets as the recession forces them to scale back growth plans.

Philip Clarke, head of rival Tesco, forewent his annual bonus last month, paying the price for a weak performance in the UK and heading off an outcry by investors increasingly critical of excessive executive pay.

Marks & Spencer’s annual report showed that chief executive Marc Bolland has taken the biggest pay cut to date among leading retailers.

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M&S, Britain’s biggest clothing retailer, said Mr Bolland’s total pay and bonus package of just under £1.7m last year was over 60 per cent below the £4.4m he received the year before.

On top of a basic salary of £975,000, pension contributions and perks such as a car and driver, Mr Bolland received a bonus of £663,000 last year, which was roughly a third of his full entitlement of up to 200 per cent of salary.

Sainsbury’s said chief executive Justin King took a nine per cent cut in his overall package, despite the fact that Sainsbury’s reported a seven per cent rise in full-year profits last month that came in at the top end of expectations.

Mr King’s basic salary rose to £920,000 from £900,000 a year earlier, but his annual cash bonus, share awards and long-term incentive plan were all reduced, cutting his total package to just under £3.4m from £3.7m a year ago.

The cut comes amidst a round of high profile shareholder revolts over executive pay.