Shareholders in the UK have dealt a blow to Burberry over the retailer’s “excessive” executive pay, with nearly a third voting against generous payouts that include a £5.4m (€6m) share award for former boss Christopher Bailey. A tally of proxy votes showed that 31.48% of investors rejected the company’s remuneration report at its annual general meeting.
It means the resolution provisionally passed with only 68.51% in favour of the pay packets.
One shareholder asked chairman Sir John Peace to explain the remuneration decisions for both chief financial officer Julie Brown and now-president and chief creative officer Chris Bailey, calling their pay “somewhat excessive”.
“To be very clear, the board’s intent, the remuneration committee’s intent, is to do what’s right for shareholders and what’s right for the business. It’s not just to do things to be being excessive, for excessive’s sake,” Sir John told investors at the annual general meeting in London on Thursday.
“What we try to do is make sure that we attract and retain some of the best people in the industry.
“Over the course of the past few years we’ve been going through quite a significant change … moving from being a wholesale business into more of a retail and wholesale business and digital.
“So as we go through that transformation, bringing on board the right people for the future is very important as well as keeping the talent we have within the organisation.”
In total, Mr Bailey received £3.53 million for the year to March 31, nearly double the £1.89 million he pocketed a year earlier. Julie Brown, who joined the company at the start of 2017, was awarded £4.7 million, which saw her handed incentives for relinquishing her position as chief financial officer of Smith and Nephew.
Remuneration committee chair Fabiola Arredondo stressed that the company has to “compete on a global level for talent”, and as a result has tracked pay benchmarks across the luxury retail sector and been “actively engaging with shareholders” over pay in recent months.
“We’re also very socio-minded about public attitudes right now in the UK and we try to be good citizens in that context as well. We strike a balance,” Sir John said. “But if we don’t have the best people, the team capable of driving this business forward in the future, I don’t think shareholders would want that either.”