Burberry is reportedly being put under pressure by two corporate governance groups over the share awards paid to CEO and chief creative officer Christopher Bailey and CFO and COO Julie Brown.
The Investment Association has issued an amber alert to its members, The Telegraph reported, and the Institutional Shareholders Services (ISS) is encouraging investors to vote against the remuneration report.
ISS is said to have claimed that Bailey’s pay was above the average amount for a CEO. The two groups also claimed that Brown is being compensated for shares she gave up at her last employer medical equipment supplier Smith & Nephew.
However, a Burberry spokeswoman disputed this. She explained that, when Brown’s was appointed in July 2016, it was decided that she would be awarded 240,000 Burberry shares as a buyout for remuneration she forfeited on leaving Smith & Nephew.
At the time it was anticipated that Brown would join the business in August or September 2016. However, due to circumstances at Smith & Nephew, she was not able to join the business until January 2017.
The Smith & Nephew and Burberry year-end dates differ by three months. Therefore, the Smith & Nephew buyout covers the period to 31 December 2016, and does not cover the period January-March 2017. Burberry said Brown has decided to waive 75% of the 2016/17 Burberry ESP award to ensure that there is no “double counting”.
The luxury fashion brand’s chairman and the remuneration committee agreed with her decision, the spokeswoman said.