Marks & Spencer chairman and chief executive, Luc Vandevelde, is not taking his much-criticised bonus payment, it was revealed today.

The dapper Belgian retailer was in line for a bonus of £816,000, comprising of £704,000 this year and a further £112,000 in future years. But Mr Vandevelde has decided not to take the bonus and instead the company is issuing him with shares with a value of £352,000 in May next year.

M&S also said it will increase Mr Vandevelde's bonus potential by £352,000. The bonus will be dependent on achieving the same financial performance targets as those of other management.

An M&S spokesman said it was Mr Vandevelde's suggestion not to take the bonus as a mark of the confidence he has in the company turning around.

The spokesman said: " He asked the Remuneration Committee to consider his suggestion and they agreed. It's a mark of his confidence in the company."

Mr Vandevelde has also reduced his notice period entitlement from 12 to nine months.

Stella Rimington, chairman of the Remuneration Committee said: "Luc has demonstrated real leadership. He had no obligation to give up his bonus and has made a very significant gesture.

"In doing so, he has shown his confidence in the future of the company and his commitment to leading its recovery. We are more convinced than ever that we chose the right man for the job."

By Deborah Bowyer