Marks & Spencer has bowed to pressure from investors after chairman Sir Stuart Rose agreed to a 25% pay cut for his final months with the high street giant.
Sir Stuart’s salary will be cut from £1.16 million to £875,000 and he will lead the search for a new independent non-executive chairman before finally leaving M&S in March 2011.
M&S is bringing in former Morrisons boss Marc Bolland as chief executive in May, although Sir Stuart will remain in his current executive chairman role for three months while Mr Bolland beds in.
The pay cut comes after reports of discontent among major shareholders already aggrieved by Sir Stuart’s current role - which combines the posts of chief executive and chairman and is against best practice.
Despite the concession to investors on pay, the retailer is effectively paying the salary of two chief executive roles until March next year.
Deputy chairman David Michels said: “The board has set out this process to ensure a smooth transition over the coming months and enable Marc to draw on Stuart’s considerable experience.”
He added: “We are pleased to be moving into the final stage of our commitment to split the roles and appoint an independent chairman by March 2011.”
M&S has already hit the headlines once over boardroom pay this year with the total £15 million package offered to Mr Bolland, which includes compensation for share options sacrificed at Morrisons.
Mr Bolland is set to take the reins at a difficult time for the retailer after two years of stuttering sales. Sir Stuart is staying on as Mr Bolland - who worked for Dutch brewer Heineken before Morrisons - has no experience of retailing outside food and drink.
The high street giant has also warned of tough times ahead for shoppers in 2010 despite the retailer’s first like-for-like sales growth in more than two years during the the 13 weeks to December 26.
Last year the group reported a 40% drop in full-year profits to £604 million and slashed its dividend payment by a third - the first dividend cut since 2000.
The group will report trading figures for the final quarter of its financial year early next month with annual results due in May.