BURBERRY shareholders yesterday staged a major revolt in protest at a multi-million pound pay package for the luxury brand’s new chief executive.
Voting at the group’s annual general meeting in London showed 52.7 per cent against a resolution which included a £7.2 million “golden hello” for Christopher Bailey, who was previously chief creative officer.
Including this performance-based shares package, split over five years, the 43-year-old Yorkshireman is in line to receive up to £10.3m a year in salary, pension, variable bonuses and long-term awards each year.
He is also due to receive shares worth £19.5m by 2018 under previous “golden handcuffs” arrangements with the group in his previous role to prevent him from joining rivals.
Afterwards, Bailey appeared to brush off the suggestion that he might hand back pay, saying: “It’s not about giving something up. It is not something I made the decision on, it is the remuneration committee and the chairman and the board.”
The vote is non-binding, so the firm will not be forced to change its policy, and related to awards over the last financial year, but chairman Sir John Peace said he was “disappointed” and would talk to shareholders to try to allay their concerns.
It was being seen as a protest vote by the company as a binding remuneration policy resolution was backed by more than four-fifths of investors – though a significant 16.1 per cent still voted against.
Peace said: “It really is an expression to us of concern over some aspects of our remuneration and I think it specifically relates to Christopher.
“I want to understand why they felt so strongly to vote against. When I understand it, I’ll know what to do.”
He defended the decision to give Bailey and previous boss Angela Ahrendts – who left earlier this year – share awards in 2010 to keep the “world-class executives” at the company.
Bailey was granted a further share award last year as he was offered jobs by rivals for “much higher than his existing package”. Defending Bailey’s pay as chief executive, Pearce said: “We know that the amount paid to Christopher is a lot of money but a lot of it is performance related which he will only receive if Burberry performs strongly, and this of course will also benefit shareholders.
“He could command a much higher package outside the UK where the size and the nature of remuneration can be different and quite often not publicly disclosed.”
He pointed to the departure of Ahrendts for a senior role at Apple for a package worth some $60m (£35.1m). He added Bailey had been “nervous” before his first AGM as chief executive. But he was applauded by investors and there was little resistance to his pay arrangements among the 80-100 gathered for the meeting in central London, where one said the new boss was “worth every single penny”.
Burberry, which dates back to 1856, has traditionally been known for its classic trench coats but has widened its appeal as a luxury brand using celebrity models such as Cara Delevingne and Emma Watson in its advertising campaigns.