Burberry’s chief executive, Christopher Bailey, has had a 75% pay cut after profits fell at the luxury fashion house.
Bailey received almost £1.9m in salary, pension and other benefits last year, down from a total of £7.5m the year before.
After receiving £5.7m in cash bonus and share awards for 2014, he got no such payments last year, the company’s annual report showed. His pay was made up of £1.1m in salary, £330,000 pension contributions and £464,000 in benefits.
His first payment from a controversial share award was also deferred by a year to take account of Burberry’s weakening financial performance. The company, famed for its £1,400 trench coats, has been affected by belt-tightening among the Chinese shoppers who account for about 40% of its sales.
Sir John Peace, Burberry’s non-executive chairman, 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 our staff.”
Bailey was awarded a million shares for free in 2013 before he became chief executive. The payment date for the first chunk of those shares was scheduled for next month but Burberry said he had asked the remuneration committee to wait a year in light of the difficult trading conditions.
“Ahead of the new vesting date in July 2017, the committee and Christopher Bailey will again assess the extent to which vesting would be appropriate,” the company said.
Bailey, who is also Burberry’s creative director, has been one of the best-paid bosses in the FTSE 100 since his promotion in 2014. Shareholders angry about his share awards voted down Burberry’s remuneration report in 2014 though the deal went through because the vote was not binding.
Burberry’s other executive directors, finance director Carol Fairweather and chief operating officer John Smith, also received no bonus or share awards. Fairweather’s pay fell by £1m to £683,000 and Smith’s almost halved from £1.52m to £813,000.
Bailey helped turn Burberry from a dull heritage brand into a luxury powerhouse worn by Alexa Chung and Emma Watson and modelled by the sons of David and Victoria Beckham. Burberry said Bailey and other directors would receive no salary increase this year and that it would delay deciding on executive share plan awards by four months to November to see how efficiency measures were progressing.