Rose fails to bag a bonus despite £1bn M&S profits

Chief executive Sir Stuart Rose said no bonus would be paid to senior managers and directors because the company did not meet its own profit targets set last year - largely due to tougher conditions faced by the high street giant in the closing months of the financial year.

Pre-tax profits were up by 4 per cent at just over £1 billion, the first time profits have exceeded the mark in a decade and only the second time the figure has been passed in the company's history.

But the results included a 1.7 per cent fall in like-for-like sales during the final three months of the year - the second successive quarter of falling sales after a disappointing Christmas. For the year as a whole, UK like-for-like sales fell 0.5 per cent, with sales of general merchandise - which includes clothes - down 0.5 per cent and food sales 0.4 per cent lower.

Sir Stuart, who is on a basic salary of £1.13 million, could have expected up to £3 million in cash bonus if the company hadmet its targets.

Last year the company paid £91 million to its 75,000 staff including £2.6 million to Sir Stuart, who has been credited with a huge turnaround in the store chain's fortunes since he took over in 2004. He told BBC TV's Breakfast programme: "We did not meet the profit target and we did not deserve the bonus. We thought we might have done a bit better. At the end of the day if you don't earn it you don't get it."

However, £16.8 million will be paid to more junior staff: £12.8 million to those working in stores and head office and around £4 million to employees in Internet and mail order operations. This was "in recognition of employees' hard work in delivering great service and dealing with considerably increased volumes".

Sir Stuart is the second high profile executive to lose out on a bonus in a week. Last week BA's chief executive Willie Walsh refused to accept a £700,000 bonus because he said it would be " inappropriate" after the Terminal 5 launch fiasco.

Sir Stuart said that the firm was "well positioned" to compete in the challenging retail environment. "We expect market conditions to remain difficult for the foreseeable future and are managing our business accordingly," he said.