Marks & Spencer has been criticised for awarding large signing-on fees to attract new executives after the retailer saw sales decline for the seventh quarter in a row.

At the company's annual general meeting at Birmingham's International Convention Centre, chief executive Stuart Rose was attacked for accepting a £1.2 million fee on top of his salary.

Private shareholder Antony Lynam said: "£1.2 million, Stuart? You've not made it yet, mate, you're still going down."

Chairman Paul Myners defended the decision, saying that Mr Rose was delivering and that he believed in the current management team.

He said: "I've no doubt that we did the right thing to recruit Stuart and his colleagues at that time. They are delivering and they will continue to do so."

The criticisms were made at what was a generally upbeat AGM with many shareholders thanking Mr Rose and the board for what they believed to be a clear plan of recovery for the company.

This was despite the retailer announcing a 5.4 per cent fall in likefor-like sales in the 14 weeks to July 9, with M&S needing a return to growth at its food department to rescue it from a heavier fall.

Clothing and homeware sales slumped 11.2 per cent in a first quarter showing labelled as "pretty grim" by Mr Rose and much worse than City fears. Food sales rose 0.7 per cent.

The market also reacted well to the retailers' report as M&S shares rallied two per cent or 7.75p, to 365.75p. All of the resolutions were passed by shareholders, although 18 per cent voted against approving the company's new performance plan.

Under the scheme, 100 senior executives will be conditionally awarded shares worth up to 200 per cent of their salary in the next few weeks. They will only receive the shares if earnings per share reach a certain level over the next three years.

And just over seven per cent voted against the remuneration report.

With regards to M& S' recent performance, Mr Rose admitted that the retail market was a cause for concern and there was still much work to be done to secure M&S on the path to recovery.

However, he insisted the underlying picture was healthier with prices now lower and 40 per cent less stock in its summer sale - due to start today,18 days later than last year.

"At first reading the figures don't look great," admitted Mr Rose. "You need to look underneath the numbers to get a feel about what's going on.

What you need to look at is the quality of earnings in general merchandise."

Mr Rose also pointed to non-food full price sales being down just 2.4 per cent, the division's best performance for three quarters.

The company also reiterated its plans to make cost savings of around £260 million in 2005/06 and £320 million by 2006/07. "We never said it was going to be easy but we have made good progress and we're moving fast," said Mr Rose. He said he was confident that the share price would get to 400 pence - the value offered by ex-Bhs boss Phillip Green's in his £9.1 billion bid for the company launched a year ago today.

Mr Rose insisted: "I believe it's a when and we're working hard to make sure that we deliver value for the shareholders."

The company also said it was looking to revamp 21 of it's stores across the UK, following trials of a new layout at four stores including the Sutton Coldfield branch.

Mr Rose drew attention to the current revamp of Birmingham's High Street store. Due to be opened in November, the store will include a new cafe, patisserie and a delicatessen. "It will be a regional flagship which we can be proud of," he said.

The company is also due to open a store in Coventry Arena in August and Fort Dunlop in September.