The pay package of Burberry’s chief executive shrank by 75% last year to £1.9m, after profits fell at the luxury fashion house.
Christopher Bailey was paid £1.1m salary, £330,000 pension and £464,000 in benefits, down from a total of £7.5m the year before. After receiving £5.7m in cash bonus and share awards for 2014, he got no such payments last year.
His first payment from a controversial share award was also deferred by a year to take account of Burberry’s weakening financial performance. The company, famed for its beige check, has been affected by a reining in of spending by Chinese shoppers, who account for about 40% of its sales.
Bailey was awarded a million shares for free in 2013 before he became chief executive. The payment date for the first chunk of those shares was scheduled for next month but Burberry said he had asked the remuneration committee to wait a year amid difficult trading conditions.
“Ahead of the new vesting date in July 2017, the committee and Christopher Bailey will again assess the extent to which vesting would be appropriate,” the company said in its annual report.
Bailey, who is also Burberry’s creative director, has been one of the best paid bosses in the FTSE 100 since his promotion in 2014. Shareholders angry about his share awards voted down Burberry’s remuneration report in 2014 though the deal went through because the vote was not binding.
Last year’s AGM was more peaceful and Bailey’s pay was voted through easily. But after a series of bruising annual meetings at which pay reports have been rejected or severely criticised, Burberry appears to have acted to take account of shareholder views to ward off potential trouble.
Burberry’s business boomed as newly affluent Chinese shoppers bought its raincoats, scarves and other clothes earlier this decade. But a slowdown in the world’s second-biggest economy has hit the company’s performance. Profit fell 10% to £421m last year and the company is cutting jobs and reducing its product range to save money.
Burberry’s other executive directors, finance director Carol Fairweather and chief operating officer John Smith, also got no bonus or share awards. Fairweather’s pay fell by £1m to £683,000 and Smith’s almost halved from £1.52m to £813,000.
This article was written by Sean Farrell, for theguardian.com on Monday 6th June 2016 13.22 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010