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Burberry investors urged to oppose board pay

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Burberry may face a potential shareholder revolt at its AGM next week after lobbying group PIRC claimed that remuneration is an issue at the company and total awards to board members “are potentially excessive”.

The organisation, which advises pension funds and asset managers, also questioned rewards paid to the group’s CEO Angela Ahrendts.

In a newsletter update to members, PIRC said: “The CEO has received a large one-off stock award during the year under review, worth 584 per cent of her base salary, which is subject to unquantified performance conditions.

“Termination provisions for the CEO include unearned bonuses, which are not considered appropriate. Further disclosure on allowance paid in cash would be welcome.”

PIRC also recommended that shareholders oppose both the remuneration report and the re-election of a number of directors, including Philip Bowman and David Tyler who are not considered independent.

Burberry announced in May that annual profits-before-tax rose 39 per cent year-on-year and full-year dividend increased 43 per cent to 20p per share, but PIRC still claims that executive pay is excessive.

The potential revolt over remuneration at the AGM on July 14th 2011 comes after the Office for National Statistics (ONS) published research yesterday showing the difference in average earnings between public and private sector employees has increased since April 2007.

Although noting that comparison is difficult due to different job types and employee characteristics, the ONS said public workers were paid on average 7.8 per cent more than private sector employees - up 2.5 per cent since 2007.

These findings from the Annual Survey of Hours and Earnings and the Labour Force Survey do not take into account data from the self-employed, and show that those with a degree in the public sector earned around 5.7 per cent less than similarly qualified private sector employees.

Additionally, the gap between the lowest and highest earners is higher in the private sector with the top five per cent of earners paid around 5.6 times more than the bottom five per cent.

Published on Wednesday 06 July by Editorial Assistant

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