Burberry faces shareholder revolt over "excessive" pay for Christopher Bailey

Helen Cahill
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Burberry - Runway - LFW February 2017
Christopher Bailey at a Burberry catwalk show (Source: Getty)

Burberry has come under fire for handing an "excessive" pay award to its outgoing chief executive.

The firm is facing the prospect of a shareholder revolt this week when the board puts its remuneration policy to an investor vote.

The shareholder advisory group Pensions & Investment Research Consultants (Pirc) has recommended investors rebel against Burberry's remuneration policy at the fashion house's annual general meeting this Thursday.

Pirc said the policy had not been created with the shareholders' best interests in mind, and called outgoing chief executive Christopher Bailey's pay "unacceptable".

Read more: Christopher Bailey named president of Burberry, replaced as chief exec

Bailey, who is staying on with the fashion house as its creative director, has received a £5.4m share award from Burberry. Pirc has strongly criticised Bailey's reward package given the "poor performance [of Burberry]... under his management".

It also said there were no performance targets tied to Bailey's "excessive" pay award.

Bailey was appointed as both chief executive and chief creative officer of Burberry three and a half years ago, and delivered his final set of results in May. Profits dived 21 per cent in the year to the end of March, falling to £458.7m. Revenues dipped two per cent to £2.8bn.

He is walking away from his business duties to focus on his creative role, and Marco Gobbetti, former head of French brand Celine, will be taking on the chief executive position. Burberry's shares jumped 6.3 per cent on the announcement of Bailey's departure.

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