11th Jul 2014 14:14
LONDON (Alliance News) - Shareholders of British luxury fashion retailer Burberry Group PLC on Friday cast a protest vote against a multi-million pound share package for Christopher Bailey, the company's new chief executive officer, who has only just taken the reins from Angela Ahrendts.
Just under 52.7% of shareholders voted against the executive directors' remuneration report for the financial year ended March 31, at the company's annual general meeting Friday. Just under 75% of all shareholders cast a vote on the report, though the vote is non-binding. The vote was seen as a protest against the amount of shares Bailey is to receive, not against Bailey.
At the same time, the directors' remuneration policy was passed easily, with almost 84% of the vote.
Bailey gets a basic annual salary of GBP1.1 million, plus an annual allowance of GBP440,000. Bailey also got a sign-on bonus of 500,000 shares upon being appointed as CEO.
Bailey, who previously had been Burberry's chief creative officer, a title he retains, took over as chief executive at the beginning of May, when Angela Ahrendts left the company to join US technology giant Apple Inc.
"After another strong trading update in which retail sales were up by 17%, we are pleased that shareholders have voted in favour of all binding votes on our remuneration policy, share plans and board appointments. However it is disappointing that the advisory vote for this year's remuneration report did not have the same level of support," said Chairman John Peace in a statement Friday afternoon.
On Thursday, the British luxury fashion retailer reported a good increase in retail revenue during the first quarter of its financial year, but said the strength of the pound continues to take a chunk out of its profits.
The demand for Burberry's goods has been driven by much of the same factors of late: travelling "luxury customers", particularly from Asia, buying the retailer's outerwear and large leather goods, such as its iconic trench coats and check-print patterned goods.
Burberry's retail sales increased to GBP370 million in the three months to June 30, up from GBP339 million in the same period the prior year. On an underlying basis, sales grew 17%, but on a reported basis only 9%, hit by the strength of sterling. Comparable sales growth in the period was 12%.
The company said Thursday that based on current rates, foreign exchange would currently wipe a total of GBP65 million of its profit for the current financial year.
Despite the warning of sterling strength, investors cheered Burberry's first quarter sales figures, as the retailer's stock stayed amongst the top FTSE 100 gainers Thursday.
Burberry shares were off 0.1% at Friday afternoon at 1,463.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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