Burberry’s executive pay practices draws protest
Royal London Asset Management, which said it would heed calls from investor advisory groups to vote against the company’s remuneration report
The Burberry shop in Knightsbridge, London.
Burberry ’s executive pay practices have drawn a protest from shareholder Royal London Asset Management, which said it would heed calls from investor advisory groups to vote against the company’s remuneration report.
Royal London will also vote against the re-election of chairman John Peace and the head of the trenchcoat maker’s remuneration committee, Fabiola Arredondo, at its annual meeting on Thursday, the fund manager said in a statement. Burberry declined to comment.
“The chaotic response to several remuneration issues” this year heightened concerns about the company’s corporate governance, Royal London’s corporate governance manager Ashley Hamilton Claxton said in the statement. Concerns focus on pay awards to Burberry’s former chief executive officer Christopher Bailey, who remains its creative chief, and chief financial officer Julie Brown.
Advisory groups Institutional Shareholder Services and the Investment Association have urged shareholders to vote against Burberry’s pay report at the AGM. Each group advises as much as 25 per cent of the shareholder base of some large UK companies.
Royal London’s decision to vote against the re-election of Peace stems from concern over the company’s reporting structure following the appointment of Marco Gobbetti as CEO. The investor is unhappy that both Mr Gobbetti and Mr Bailey will report to Mr Peace, which it says “creates further uncertainty and governance risks for investors”.
Royal London holds £33 million worth of Burberry’s shares, equal to a 0.5 percent stake.