UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): February 11, 2011

SAKS INCORPORATED

12 East 49^th Street, New York, New York 10017

(212) 940-5305

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 9, 2011, the Human Resources and Compensation Committee (the “Committee”) of the Board of Directors of Saks Incorporated (the “Company”) established the performance measures for the Company’s 2011 annual bonus program and the 2011 long-term incentive program for the Company’s executive officers, including those persons who were the “named executive officers” in the Company’s most recent filing with the Securities and Exchange Commission (“SEC”) that required disclosure pursuant to Item 402(c) of Regulation S-K.

The Committee established the following performance measures for the 2011 annual bonus program: (i) earnings before interest, taxes, depreciation and amortization (“EBITDA”) at specified levels (75% weight) and (ii) the accomplishment of key corporate objectives (25% weight). For fiscal year 2011, the payout of each of the named executive’s target bonus will be determined according to the Company’s level of achievement for the Company’s 2011 fiscal year against each of the performance measures as follows:

Performance Measures

In addition, should the Company’s EBITDA exceed certain levels, the payout of the corporate objectives component of an executive’s target bonus may be increased; should the Company’s EBITDA not be achieved at certain levels, the payout of the corporate objectives component of an executive’s target bonus may be decreased. In addition, the Committee may reduce award amounts under the 2011 annual bonus program at its discretion.

The Company’s 2011 long-term incentive program consists of awards of performance shares, performance units to be settled in cash, and restricted stock granted under the Company’s 2009 Long-Term Incentive Plan. The Committee determined that the payout of performance shares and performance units would be subject to the following performance measures: EBITDA at specified levels (75% weight) and comparable store sales at specified levels (25% weight). The payout of the awards for achievement of each of the performance measures is capped at 125%. The payout of awards will be determined according to the Company’s level of achievement against each of the performance measures as follows:

Performance Measures

On February 9, 2011, the Committee reviewed the target bonus for the Company’s executive officers, including those persons who were the “named executive officers” in the Company’s most recent filing with the SEC that required disclosure pursuant to Item 402(c) of Regulation S-K. The Committee did not change the target bonus for any named executive officer, except for Ronald L. Frasch, President, whose target bonus was increased from 80% to 85% of base salary, and Kevin G. Wills, Executive Vice President and Chief Financial Officer, whose target bonus was increased from 70% to 75% of base salary.

The Committee also approved increases to the base salaries of the following named executive officers: Stephen I. Sadove, Chief Executive Officer and Chairman of the Board, from $985,000 to $1,015,000; Ronald L. Frasch, President, from $976,500 to $1,000,000; Kevin G. Wills, from $584,250 to $600,000; Jennifer de Winter, Executive Vice President, Stores, from $427,500 to $500,000; and Christine A. Morena, Executive Vice President, Chief Human Resources Officer, from $413,844 to $425,000.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.