Burberry’s Christopher Bailey, who has previously come under fire for his salary, was handed just short of £8m by the luxury goods giant for his first year as Chief Creative and Chief Executive Officer.
At its annual meeting last summer, Burberry was greeted with a shareholder rebellion against its remuneration report. Only a year later, the British heritage brand rewarded Bailey with a pay and bonus package worth £7.9m.
Bailey, alongside former CEO Angela Ahrendts, has been widely credited with turning around the trench coat maker into a pioneering digital business and since he joined the brand, the company share price increased by over 500%.
And yet discerning investors might still revolt.
Burberry recognised that the amount it was paying out to Bailey caused concern but argued that much of the opposition was down to poor communication.
“These decisions were not taken lightly,” wrote Ian Carter, Chairman of Burberry’s remuneration committee, in the annual report. “They were difficult decisions which were made after considerable debate.”
In the report, released yesterday, the retailer acknowledges that it might not have been “sufficiently clear” on its reasons behind Bailey’s reward but emphasised that it had to act after Bailey was approached by a rival brand offering substantially higher rewards.
“Put simply, the market value for his creative talents was far in excess of what he was earning,” cites the report.
John Smith, Burberry’s Chief Operating Officer, received £1.5m, while Carol Fairweather, Chief Financial Officer, was also paid £1.m.