Burberry - AGM 15 July 2020
Items 2 and 16: Remuneration policy and Burberry Share Plan 2020
The terms of the new BSP are materially similar to those of the current LTIP, save that the new plan allows awards to be granted to Executive Directors without performance conditions, which does not correspond to our voting principles. ECGS is not in favour of the restricted grants to executive directors, especially when the company has struggled to deliver target performance for previous LTIP vesting. The 50% reduction in the individual caps cannot replace the sustainable performance conditions, which we consider essential to align the executive remuneration and shareholder value creation.
Item 3: Remuneration report
The 2019/20 remuneration reflects well the group performance and we appreciate that the Committee did not re-test performance targets despite the Covid-19 impact. Given that STI and LTI rely on the same performance condition (adjusted profit before tax - PBT), the gained incentive is zero. We consider that the CEO’s fixed pay is excessive and especially his extremely high pension contribution (30% of base salary). We regret that Burberry decided to postpone its reduction, while other FTSE100 companies have started pension cuts during the 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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