Burberry faces potential shareholder opposition over executive pay at its annual general meeting next month, after a governance advisory body recommended investors vote against the British fashion house’s proposed new remuneration policy.
In a report circulated to clients on Tuesday, Institutional Shareholder Services acknowledged Burberry’s rationale for the overhaul and noted the company had modified its original proposals following shareholder feedback, but the proxy group said executives stood to earn significantly more without giving up much of their guaranteed pay, warranting a vote against the policy.
Under Burberry’s proposed executive pay overhaul, CEO Joshua Schulman will get performance share awards worth up to 300% of his salary, with his total potential package reaching £12.24 million ($16.41 million) if the brand achieves maximum performance targets and its share price rises by 50%.
The 170-year-old luxury brand has been trying to win back the appeal of younger shoppers, while cutting costs to undo years of underperformance. However, the Iran war threw a wrench in its turnaround progress as weaker revenues in Europe and the Middle East spooked investors.
Burberry’s AGM is scheduled for July 15 in London, with shareholder voting results to be published afterwards.