Burberry shareholder rebellion over top executives' 'excessive' pay

Shareholders controlling more than 10 per cent of luxury fashion house Burberry yesterday failed to back the company's executive pay policies, which included giving shares worth nearly £5.8 million to chief executive Angela Ahrendts, pictured right, last year.

A total of 12.8 per cent of shareholders did not vote for the company's remuneration report at its annual meeting, although the resolution to approve the report was still passed.

Investor body Pirc had recommended shareholders vote against the report, saying the total rewards for executives in the past year and the proposed awards for the coming year were excessive.

The lobby group, which advises big-hitting pension funds and asset managers, pointed towards a one-off share payment worth nearly 5.8m made last year to Ahrendts, which was equivalent to nearly six times her base salary of 990,000.

It also said that the highest targets under the firm's share plan were not considered challenging enough.

No specific targets were disclosed for the annual bonus scheme and awards are made at the discretion of the remuneration committee, it added.

The annual meeting came the day after Burberry saw its shares jump to a record high.

The 155-year-old firm announced on Wednesday that retail sales rose 49 per cent in the three months to 30 June, with leather bags and raincoats flying off the shelves. Burberry, which in March revealed it sold out of one style of ladies' trenchcoat the day after the Duchess of Cambridge wore it, saw total sales rise by 34 per cent to 367m over the three months.

It has enjoyed success in rapidly-expanding overseas markets such as China in recent years where the demand for British fashion goods has boomed.