Burberry, 17 July 2019
Leadership changesDuring the year, Mr. Gerard Murphy was appointed as Chairman following the retirement of Mr. Peace from the Board after sixteen years. Item 2: Approve the remuneration report The structure is weighted more towards rewarding long-term performance. However, potential incentive pay and benefits are excessive. Adjusted profit before tax determines 100% of the STI and 50% of the LTI, making incentive pay overly reliant on a single performance metric. (The recruitment award, made in the previous year, is not conditional on performance.) The quantum was excessive. We recommend shareholders oppose.
Item 13: Re-elect PricewaterhouseCoopersPricewaterhouseCoopers LLP (PwC) has remained in place as auditor since prior to the Initial Public Offering of the Company in 2002, but an audit tender was held in 2010. The Company is required to replace PwC with another firm of auditors no later than for the financial year commencing 29 March 2020. The Board has held a tender and selected Ernst & Young (EY) as external auditor from 2020/21 financial year , subject to shareholder approval at the AGM in 2020. They will shadow PwC for 2019/20 financial year. It seems inappropriate for EY to do this before approval by shareholders. Other companies have addressed this by seeking shareholder approval at a previous AGM. Nevertheless, we do not consider this cause to recommend shareholders oppose the re-election of PwC for the coming year.
Burberry Group designs, makes, sources and sells luxury products under the Burberry brand. Co.'s products are for women, men and children and include apparel, accessories, and beauty. Co.'s products are sold globally through its directly operated store network and online at Burberry.com, as well as through franchisees and third-party retailers, both offline and online. In a few selected areas such as Eyewear and Beauty, Co. uses the product and distribution capability of licensing partners. Co. operates in three regions: Asia Pacific; Europe, Middle East, India and Africa; and Americas. As of Mar 31 2017, Co.'s store portfolio had 469 directly-operated stores and 48 franchise stores.
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