The pay packets of Sainsbury’s (SBRY) senior execs were cut last year as the supermarket paid out no annual bonuses as performance-related targets were not hit.

CEO Mike Coupe’s total pay fell by 16.2% from £2.8m to £2.35m as his annual bonus payout was slashed to zero from £767k in 2015/16.

Former finance director and Argos boss John Rogers saw his pay slide 10.6% to £1.6m after missing out on an annual bonus which totalled £472k last year.

The impact of being awarded no annual bonus was mitigated by awards made under the supermarket’s long-term incentive plan, which totalled £408k for Coupe and £245k for Rogers both up from zero LTIP awards last year.

The supermarket’s annual bonus payments are driven by a mix of targets, related to profits, sales and “customer-focussed and individual performance” metrics.

Sainsbury’s said in its annual report: “Overall financial results for the year were good in the context of a challenging and competitive trading environment. However, the profit and sales outcomes were below the threshold performance hurdles due to the stretch of the targets.”

The supermarket had set a base of £540m in annual profits to trigger annual bonuses and sales of £25.9bn.

Factoring out the impact of the acquisition of Home Retail Group, Sainsbury’s ultimately achieved underlying profit before tax of £502m and total sales of £25.6bn.

Both Coupe and Rogers will receive 1.5% a bump to their base pay in 2017/18, with Coupe’s rising 1.5% to £943.4k and Rogers’ to £695.4k.

Overall average pay for Sainsbury’s employees rose by 4% during the year, with benefits up 15.6% but bonus payouts falling by 37.9%.

Sainsbury’s has also tweaked its future exec pay policy, introducing a two-year holding period for share awards, meaning stock will not normally be released until five years after grant, and increasing shareholding guidelines from 1.5X to 2X salary for exec directors.

The annual report stated: ”We continue to consider wider colleague reward when determining pay arrangements for the Executive Directors, and this remains a fundamental part of our approach to pay. There is a strong focus on core values across the business, and this is reflected in the strategy.

“Taking a responsible and sustainable approach to business is a defining characteristic of the Sainsbury’s culture and this extends to the approach to executive remuneration.”