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Burberry comes under pay pressure from investors

Burberry's new chief executive takes up his role in July - PA
Burberry's new chief executive takes up his role in July - PA

Burberry is coming under pressure from two influential shareholder bodies over the awards paid to new finance boss Julie Brown and to Christopher Bailey, who has been juggling both the chief creative and chief executive roles.

The Investment Association has issued a so-called 'amber alert' to its members ahead of Burberry's shareholder meeting next week while Institutional Shareholder Services (ISS) has also urged investor to vote against the luxury fashion group's remuneration report.

Each group advises around a quarter of the shareholder base of most large UK companies.

ISS said that Mr Bailey was paid above the average amount for FTSE 100 chief executives, which is a role that he is relinquishing this year and taking on a 'president' role instead. Marco Gobetti from Celine will takeover as chief executive next week.

Christopher Bailey with models Suki Waterhouse (left) and Cara Delevingne (right)
Christopher Bailey with models Suki Waterhouse (left) and Cara Delevingne (right)

The lobby groups have also heavily focused on the share awards handed to Ms Brown that were intended to compensate for the awards she forfeited when leaving Smith & Nephew. Both the Investment Association and ISS have said that the level of buyout awards were too high. On Monday, Burberry quietly announced that Ms Brown had decided to waive 75pc of the Smith & Nephew shares that she was granted.

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Ms Brown was handed £4m of shares when she joined from Smith & Nephew and received £550,000 in cash to make up for a bonus she would have received.

The criticism over Burberry's pay comes despite efforts by the board to avert another shareholder rebellion. In 2014 more than half of investors voted against Mr Bailey's £20m pay package.

Burberry’s annual report says the group plans to lower the maximum annual salary increase for its top executives from 15pc to 10pc and has also proposed that bonus pay it capped at twice the base salary compared to 2.25 times larger under the previous policy.

This year Mr Bailey is due to receive a total £3.5m pay package.