Debenhams chief Earl to waive more than half her bonus

Belinda Earl, the chief executive of Debenhams, has decided to waive more than half of her annual bonus, shareholders will be told this week.

Documents detailing the terms of the £1.7bn takeover offer for the department store group show she will take £240,000 of the £542,000 awarded by the remuneration committee.

Ms Earl felt the cut was appropriate because of the uncertainty facing the business, according to reports at the weekend. She is expected to be made redundant once the takeover by the venture capital groups CVC and Texas Pacific Group (TPG) is completed next month. She stands to receive about £3m in compensation.

However, her total remuneration package for the year to 30 August amounted to £864,704, a 70 per cent increase on the £508,953 she received for the previous financial year.

The executive directors were awarded a bonus worth 90 per cent of their salary under an incentive scheme that set a target for the company's pre-tax profit. In 2003, Debenhams achieved a £172.6m profit compared with a target of £175m. "The committee views this as an outstanding performance, particularly in view of the vast amount of additional work undertaken by management to facilitate the due diligence processes following which offers have been made to shareholders by both Permira and CVC/TPG," the document said.

Last month, CVC/TPG topped a bid by Permira, a rival private equity firm, with a £1.7bn offer. If the deal goes through John Lovering, the retail entrepreneur behind Homebase, is expected to become non-executive chairman.

Rob Templeman, the former Homebase chief executive, and Chris Woodhouse, the DIY retailer's former commercial director, are tipped to become Debenhams' chief executive and finance director. Neither has any experience of running a clothes retailer.

The three will share 8.8 per cent of the equity in the private company, while CVC and Texas Pacific will own 37.9 per cent apiece and Merrill Lynch Private Equity 15.4 per cent.