Marks & Spencer's Stuart Rose opts to take £1m pay cut

Rose and his marketing director Steve Sharp have agreed to hand over their entitlement to large chunks of their performance-related pay that would have been paid in shares.

The moves came amid mounting concerns about the way the M&S board has been governed, with no apparent successor being groomed for Rose and his controversial position as both chairman and chief executive.

Rose agreed to waive part of his performance share plan that would have entitled him to 394,967 shares. At today's price of 293p a share, that is worth more than £1.1 million.

Sharp has agreed that he will not take the 197,484 shares he was owed — currently worth nearly £580,000.

M&S clothing department head Kate Bostock and chief financial officer Ian Dyson will not give up their entitlements.

Under the three-year performance plan, Rose will now get 789,933 shares, currently worth £2.3 million.

He said: "The board of M&S is acutely aware of the governance issues we face."

M&S is still smarting from the raw fury expressed by shareholders last March at the way it handled the move to make chief executive Rose chairman. The dual role appointment was an utter flouting of good governance rules.

Instead of negotiating and explaining itself clearly with investors, it phoned key fund managers on a Sunday night to inform them the move was to be announced first thing the next morning.

The investment community has been seething ever since, not helped by M&S's poor trading performance since then.

At the weekend, M&S pledged that in September it would start the hunt for a chief executive to replace Rose so he can make an early exit next year.

Under the terms of that announcement last March, he agreed to stay until July 2011 at the latest but is now known to want to leave soon.

M&S has cut hundreds of jobs as shoppers have shunned its stores during the recession and in May it cut its dividend to shareholders for the first time in nine years.

In the face of such pressure, Rose followed a growing band of his fellow corporate executives at troubled companies volunteering to take pay cuts.

Willie Walsh, chief executive of British Airways, has said he will work unpaid for a month, and is asking his staff to do the same.