Burberry faces shareholder revolt over 'excessive' pay
Luxury fashion house Burberry faces a potential revolt over "excessive" executive pay after a lobby group urged its members to vote against the company's remuneration plans.
PIRC, which advises big-hitting pension funds and asset managers, said the total rewards for executives in the past year and the proposed awards for the coming year are excessive. It pointed towards a one-off share payment worth nearly £5.8m made last year to chief executive Angela Ahrendts, which was equivalent to nearly six times her base salary of £990,000.
PIRC has recommended that shareholders vote against the remuneration report at its annual meeting on July 14.
It also says that the highest targets under its share plan are not considered challenging enough.
No specific targets are disclosed for the annual bonus scheme and awards are made at the discretion of the remuneration committee, it adds.
Burberry has enjoyed success in rapidly expanding overseas markets such as China in recent years where the demand for British fashion goods has boomed.
The 155-year-old maker of raincoats and handbags reported a 39% increase in underlying pre-tax profits to £298m in the year to the end of March, after a 27% increase in revenues to £1.5bn.
But one City source said he did not expect a significant rebellion over pay because the company had been so successful in recent years.
He said: "They pay an awful lot of money to their top guys.
"In the context of another company you would be horrified but luxury goods companies are a bit different."