M&S chief's bonus to be axed

Marks & Spencer intends to block a bonus payment of £810,000 to its controversial chairman, Luc Vandevelde, prompting speculation that the Belgian might quit the troubled stores group.

M&S directors have been embarrassed by the public outcry over the bonus, to which Vandevelde claimed he was entitled despite a disastrous commercial performance from M&S, once the British high street's flagship.

His fate will be decided by a meeting of the M&S remuneration committee, headed by former MI5 chief Dame Stella Rimington, early next month. One source close to the board said yesterday: 'The chances that he will get this bonus are zero.'

But the decision to block the bonus payment does not mean that Vandevelde, 48, is down to his last few pounds. He has been paid his annual salary of £650,000, a £2 million 'golden hello' in shares, and stock options exceeding another £10m.

Directors will ask Vandevelde to voluntarily waive the bonus element of his pay, but insiders believe the chairman will refuse, preferring instead to quit the company and seek a bigger payout in the form of compensation, claiming breach of contract.

In his year in charge Vandevelde has seen profits and shares continue to fall. Last month he announced 4,000 job cuts and a complete withdrawal from continental Europe, where M&S had expanded rapidly.

M&S still faces legal action in the French and European courts for alleged breaches of employment law when it announced the sacking of workers on the continent, which prompted nationwide demonstrations in France.

His insistence that he should still be paid the bonus, has enraged M&S middle-management, who have seen their own bonuses scrapped.