CHRISTOPHER Bailey, Burberry chief executive, and the iconic fashion company were yesterday bidding to stave off a shareholder revolt over a pay deal that includes a shares package worth in the region of £20m.
The London-based global fashion chain, founded in 1856, will hold its annual general meeting this Friday and some institutional investors are understood to be concerned about Bailey’s “golden hello”.
Bailey took over as chief executive from Angela Ahrendts in May, and has a £1.1m salary, boosted with pension top ups of around one third of his salary.
The Investment Management Association has put an “amber top” rating on Burberry’s pay policies ahead of the annual shareholder meeting, suggesting its members, who speak for about 15 per cent of the stock market, should closely review Bailey’s awards before casting their votes.
To add to Burberry’s woes, Fidelity Worldwide Investment last week also announced it had recently voted against the proposed pay for executives in the majority of UK companies it has invested in.
However, of particular contention have been both his award of 500,000 shares worth around £7.3m subject to performance, and his £444,000 annual allowance, an increase on the 387,000 allowance that Ahrendts received.
In an “additional disclosure note” published ahead of Friday’s meeting, Burberry said the unusually high award was offered “as a means of providing [Bailey] with an increase to his fixed remuneration without increasing other elements of his remuneration”.
Bailey will also start to gain from two share awards totalling over 1.35m shares that he received when he was chief creative officer at the company.
Sources at the fashion firm argued that Bailey’s pay was in line with similar packages amongst peers, and was justified by the record of improved returns at the company.
In May Burberry reported record profits and revenue for the last financial year, with pre-tax profits up to £461m and revenues up to £2.33bn.