LONDON, United Kingdom — Burberry Group Plc fended off a shareholder revolt over executive pay at Marco Gobbetti’s first annual meeting as chief executive officer, overcoming objections from some investors and advisory groups.
After the trenchcoat maker took steps to placate shareholders ahead of the Thursday meeting, 31.5 percent of votes were cast against the company’s pay report, the company said in a provisional result. Institutional Shareholder Services had urged investors to reject the package and the UK’s Investment Association, an industry body, voiced worries.
Chief financial officer Julie Brown waived up to £2.4 million ($3.1 million) of previously agreed stock awards in June following investor pressure. Former CEO Christopher Bailey, who yielded that role to Gobbetti this month but remains chief creative officer, had already said he would not take a bonus, though he’s still eligible for about £11 million worth of stock awards from previous years’ packages.
ISS had criticised one of Bailey’s earlier awards as “murky” and said the company’s remuneration practices were “not in line with market standards.” Shareholder Royal London Asset Management, which has a 0.5 percent stake, said Burberry’s response to questions over pay had been “chaotic” and raised concerns about corporate governance, saying it would vote against the remuneration report.
The meeting caps an eventful first nine days in his new role for Gobbetti, previously CEO at LVMH-owned French fashion house Celine. The UK luxury company posted strong quarterly results Wednesday.
Burberry has faced shareholder ire over its pay plans before. In 2014, investors rejected its awards to executives, although the vote was only advisory. Energy giant BP Plc, which received a similar rebuke in 2016, trimmed its chief’s pay ahead of this year’s meeting in May. Also in that month, 61 percent of shareholders at education company Pearson Plc voted against CEO John Fallon’s pay.
By Cat Rutter Pooley; editors: Tom Contiliano, Eric Pfanner, Paul Jarvis.