Dawson International's chairman Mike Hartley saw his remuneration tumble from £505,000 to £265,000 last year as the firm slid into the red.

However, Dawson is asking shareholders to approve a 12-month extension to the expiry date of four million of his six million share options, which were due to lapse this year.

The cashmere group, which posted results for 2006 on Monday and published its annual report yesterday, paid Hartley and finance director David Cooper a total of £397,000, against £700,000 in 2005 when Dawson broke through into profit.

Hartley received only his basic £265,000 fee, while Cooper earned £14,000 in bonus to add to his £118,000 salary. He also saw a £256,000 increase in the transfer value of his accrued pension to £745,000.

Hartley has no pension with the company but does have options over six million shares, at exercise prices of 5p upwards, all of which are currently "under water".

The shares closed yesterday at 4.25p, and three million of the options expire this month, with another one million lapsing at the end of the year.

The report says shareholders will be asked later this month to approve a 12-month extension to the expiry date of all four million options.

Cooper and new US-based chief executive Andy Bartmess share 3.5 million long-term options exercisable over three years from next May at prices of 7.625p and 10.5p.

Hartley's stake fell from 797,200 shares after a sale of 375,000 shares last year at prices above 10p, weeks before a profit warning. He apologised at the annual meeting and said the timing of a tax-driven sale was unfortunate and coincidental.

The remuneration committee is made up of three independent non-executives, though until February 2006 it comprised Hartley, Cooper and former director Gianni Ghione, who was paid £147,000 in 2005 but only £35,000 last year. He resigned last June.