Marks & Spencer (LON: MKS) has announced plans to block annual bonuses for the group’s top executives amid a plunge in annual profits.

The company said that the decision to cut bonuses was “not taken lightly and was the result of careful consideration of a number of factors”.

“Pre-tax profit was below the threshold required to pay bonuses to colleagues elsewhere in the business, and in the interests of fairness it would not be appropriate to pay a bonus to directors,” said Vindi Banga, the senior non-executive director.

The announcement comes weeks after the retailer’s decision to close 100 stores over the next four years, leading to thousands of job losses.

The removal of a bonus will mean chief executive Steve Rowe will take home £500,000 less than he did last year. His total pay package is still £1.12 million.

According to the remuneration committee, Rowe agreed “that it would not be appropriate to award any salary increase to the CEO for July 2018, despite no increase in Steve Rowe’s salary since his appointment to CEO in 2016”.

The group is attempting to save costs after last month it reported a 62 percent drop in pre-tax profits to £66.8 million after racking up over £500 million in restructuring costs.

“We have worked hard to put out the fires in our business over the past couple of years and are now in the first phase of our transformation plan, restoring the basics so that we can deliver sustainable, profitable growth to investors, colleagues and the communities in which we operate,” said Rowe.

Following poor results from M&S, the group narrowly avoided being relegated from the FTSE 100 in a reshuffle.

“M&S boss Steve Rowe is promising transformation, and has been candid in admitting it’s a lengthy road ahead,” said Laith Khalaf from Hargreaves Lansdown.

“However, the pace of disruptive technological change means making M&S special again is a moving target, and management are taking aim from a long way out.”