Burberry shareholders back CEO pay boost, but 37% vote against
Burberry CEO Compensation Overhaul and Shareholder Response
By Helen Reid
Majority Support for Executive Pay Overhaul
LONDON, July 15 (Reuters) - A majority of Burberry investors on Wednesday supported an executive pay overhaul allowing CEO Joshua Schulman to get much bigger share awards, significantly increasing his compensation if performance and share price targets are met.
Shareholder Dissent and Voting Breakdown
Many shareholders rebelled against the change, however, with 37% of votes at the company's annual general meeting against and 63% in favour.
Details of the New Compensation Policy
Under the new policy, Schulman would get performance share awards worth up to 300% of his salary, with his total potential package reaching £12.24 million ($16.41 million) if the brand achieves maximum performance targets and its share price rises by 50%.
Proxy Advisers' Recommendations
Influential proxy advisers Institutional Shareholder Services and Glass Lewis had both recommended investors vote against the change and vote against the resolution on directors' remuneration policy.
Burberry's Response to Investor Pushback
In a statement acknowledging the investor pushback, Burberry said its board had been consulting with shareholders in the run-up to the AGM and would continue to engage to respond to their concerns, and provide an update within six months — as required by UK governance rules for any resolution with less than 80% support.
Burberry said both resolutions were supported by its 10 largest shareholders.
CEO Schulman's Leadership and Company Performance
Schulman is leading a turnaround at Burberry, and has slashed jobs and returned the company to profit.
Burberry's Performance Compared to Rivals
In a struggling global luxury sector, Burberry has rewarded shareholders better, in terms of total returns over the two years since he joined, than bigger rivals like LVMH, Hermes, Kering, and Richemont.
Board Changes at Burberry
Investors also confirmed William Jackson as Burberry's new chair, taking over from Gerry Murphy, who has held the role since 2018.
(Reporting by Helen Reid and Yamini Kalia. Editing by Jan Harvey and Mark Potter)
