Burberry chief executive Joshua Schulman could earn up to £12.2m under a new bonus scheme, as the luxury fashion retailer also scaled back its climate ambitions.

Schulman, who joined the British brand in July 2024 from US fashion label Coach, was paid £4m in the year to March. This included £1.2m in basic pay, a £2.3m annual cash bonus and £299,000 in relocation support following his move from New York.

The package was up from £2.5m for his first nine months in the role.

From July, Schulman’s salary will rise by 3 per cent to £1.24m. He will also be eligible for a new long-term share award worth up to 300 per cent of salary, provided he hits performance targets including growing Burberry’s annual revenues to £3.1bn by 2029.

The new award will sit alongside an existing share bonus, which is being reduced slightly from a maximum of 162.5 per cent of salary to 150 per cent, subject to shareholder approval at Burberry’s annual meeting in July.

Burberry said Schulman’s target pay was £6.4m, placing him at the upper end of FTSE 100 executive pay but towards the lower end of global luxury peers.

However, the company said this could rise to £12.2m over three years if he meets its most demanding performance targets and Burberry’s share price increases by 50 per cent.

Burberry remuneration committee chair Danuta Gray said the reward scheme had been designed to be “appropriately incentivising” and to help retain Schulman by improving his pay position compared with leaders at rival luxury brands.

The retailer said it had not sought to match US pay levels and that any payout would depend on the delivery of “stretching performance targets”.

Finance director Kate Ferry’s pay also more than doubled to £2.5m, up from £904,000 the previous year. Her package included a £1.3m cash bonus and a £457,000 long-term bonus.

Ferry could earn £5.6m this year if she hits all targets and Burberry’s share price rises by 50 per cent.

The pay increases come as Burberry continues its turnaround under Schulman’s Burberry Forward strategy. The company reported pre-tax profits of £49m in the year to 28 March, compared with a £66m loss the previous year, after cutting £80m in annual costs, reducing store numbers and winning back shoppers in China and North America.

Sales were flat year on year at £2.4bn once currency movements were stripped out, as the luxury retailer moved away from discounting and focused on core products including trench coats, scarves and bags.

However, Burberry has also pushed back its carbon neutral deadline by a decade to 2050.

The move marks a shift from targets set under Schulman’s predecessor, which included a pledge to have a net positive impact on the climate by 2040 and reduce indirect greenhouse gas emissions by 46 per cent by the end of the decade.

In its annual report, Burberry said it had “refined” its climate targets to reflect a better understanding of greenhouse gas emissions across its value chain.

It added that the revised targets represented a “pragmatic response to external factors”, while maintaining ambition in line with its assessment of climate change as a principal risk to the business.

Burberry joins a growing list of major companies to have softened environmental targets in recent years, including Unilever and BP.