Marks and Spencer has quashed rumours that it is risking a row with shareholders over a proposed bonus for the chairman saying it is part of his contract.

When Luc Vandevelde was taken on last year, it was agreed that he would be paid a performance bonus target equal to one year's salary if he met targets.

A spokesman for M&S told just-style: "The bonus has yet to be approved by the remuneration committee which should happen in May. The bonus is part of the chairman's contract and was agreed when securing him. He was set performance targets to achieve."

If the bonus is approved, the dapper Belgian retailer is set to receive a bumper £650,000 ($930,000).

Last week, Mr Vandevelde announced a massive recovery plan for the struggling retailer which includes the axing of 4,390 jobs.

M&S is closing its stores in Continental Europe, selling its two US businesses, Brooks Brothers and Kings Super Markets and closing its Direct catalogue business in the UK.

By Deborah Bowyer