Leading discount footwear chain Payless ShoeSource Inc has revealed its chairman and chief executive did not receive a bonus last year despite a sharp rise in profits.

The operator of nearly 5,000 stores said in a filing with the Securities and Exchange Commission it withheld bonuses for all its executives including Steven Douglass as it failed to meet an internal earnings target.

The company axed around 100 loss-making stores in 2002 but posted a full year profit of $4.64 per diluted share compared to $2.01 per diluted share in the year-ago period.

"For the annual performance period, the company's performance was below the threshold performance levels for EBIT,” it said. “As a result no executive officer received an annual incentive award based on company performance for fiscal 2002."