Luxury fashion group Burberry has issued a supplementary note to shareholders to clarify why it has awarded chief executive Christopher Bailey a 440,000 pound cash allowance.
The move came as the fashion house braced itself for a protest vote from shareholders this Friday over the cash allowance as well as the 22.5 million pound “golden handcuff” awarded to Bailey during the past year, The Guardian reports.
Burberry’s note to shareholders, stated that the payment had been offered “as a means of providing [Bailey] with an increase to his fixed remuneration without increasing other elements of his remuneration”.
The additional disclosure note added: “For example, if the allowance had been provided as an increase to his salary, this would have substantially increased the value of his annual bonus share awards and pension allowance.”
Bailey, who was promoted to chief executive in May alongside his chief creative officer role, is paid a salary of 1.1 million pounds, an annual cash bonus of up to twice his salary (2.2 million pounds), share awards of up to four times his salary (4.4 million pounds), and pension contributions of a third of his salary (330,000 pounds).
The newspaper also reports that several investor advisory groups, including the Investment Management Association, have raised concerns about the pay arrangements and that all members should “closely review” Bailey’s awards before casting their votes.
Burberry giving their CEO a cash allowance isn’t something new, Bailey’s predecessor Angela Ahrendts, also received a 387,000 pound annual allowance, which she claimed covered costs such as her car, driver and Burberry wardrobe.