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M&S boss gets £2.5m pay deal while profits drop for first time since 2009

The boss of Marks&Spencer, Marc Bolland, was awarded a £2.5m pay deal despite the retailer recording its first fall in profits in three years.

While the total package is a marked reduction on the Dutchman's previous year's pay, which totalled around £4.96m, it comes after a year in which he was forced to slash his sales targets.

Mr Bolland was awarded a salary of £975,000, an annual bonus of £332,000, the same amount in deferred shares and £500,000 left over from his golden handshake after joining from supermarket Morrisons, as well as other allowances and benefits.

Shareholders will have a chance to vote on the remuneration report at the high street giant's annual meeting on July 10.

A number of top-flight companies have faced significant investor anger over excessive boardroom pay in what was dubbed the "shareholder spring".

A failure to meet pre-tax profit targets for the year was behind the drop in the total pay package, although he was rewarded for meeting other targets encompassing areas such as cost-savings and developing the business overseas.

M&S saw underlying pre-tax profits drop 1% to £705.9m in the year to March 31 - the first dip in profits since 2009 - while total sales grew 2% to £9.9bn.

Mr Bolland set a target to grow revenues by between £1.5bn and £2.5bn over three years, but as a result of the harsh economic climate cut this target to between £1.1bn and £1.7bn.

M&S saw its profits smash through the £1bn barrier for the first time in a decade in 2008, but the financial crisis hurt shoppers and heralded an era of fierce discounting on the high street.

While the squeeze on household incomes in the UK, where M&S has 700 stores, has driven the weaker performance, some analysts also placed a failure to keep up with its rivals in clothing, such as Next and Primark, at the heart of its problems.