Burberry boss's pay down by 75 per cent after tough year
Burberry chief executive Christopher Bailey has seen his pay plummet 75 per cent as the fashion retailer battles slowing growth and a falling share price.
Mr Bailey’s pay for 2016 came in at £1.9 million, down from £7.5 million, after he lost out on a bonus due to Burberry missing profit targets.
Last year, the Halifax-born executive’s bonus alone stood at £1.7 million and he also received incentive payments that boosted his award.
Burberry’s annual report reveals that Mr Bailey’s base salary remained flat at £1.1 million and was topped up by £464,000 of allowances and pension payments of £330,000.
Chairman John Peace said: “Our overall approach to incentive structures for all staff, including senior management, is based on performance.”
“When the business does not perform as well, this has an impact on what we pay to our staff. And when the share price falls as it has in the past year, this has a substantial impact on historical share awards.”
Last month, the group said it would slash £100 million in costs to help offset difficult trading after reporting a 10 per cent fall in full year profits.
Around £20m of savings will come through in the current year.
To compound matters, the company’s share price has dropped 35 per cent over the last 12 months.
The luxury firm, which is famous for its trench coats and check scarves, has been hit by lower spending by Chinese tourists in continental Europe and a collapse in the Hong Kong luxury market.
The retailer makes around a third of its sales from the Asia Pacific region and has been hit hard as Chinese consumers have reined in their spending, particularly in Hong Kong - traditionally a prime shopping destination for Chinese consumers.
Burberry has plans to move its 800 workers in Castleford and Keighley, where the gabardine fabric is woven, to a new state-of-the-art manufacturing and weaving facility in Leeds.
Burberry is spending over £50m on the new facility, situated on the South Bank of Leeds, which will employ more than 1,000 people when it is completed in 2019.
The new site will offer increased capacity for trench coat production, more sustainable and efficient ways of manufacturing and the potential to produce other coats and outerwear.
Burberry reported adjusted pre-tax profit of £421m for the year to end-March, broadly in line with analysts’ forecasts.