Burberry’s Bailey to get £10.5m in shares when he checks out as CEO

Burberry is to hand Christopher Bailey shares worth £10.5 million (HK$105.5 million) next month when day-to-day management of the luxury goods retailer switches to a newly recruited chief executive. Christopher Bailey is to receive 600,000 of the 1 million shares he was awarded in 2013, at a time when the company was concerned he might be poached by a rival.

Bailey will receive the rest of the 1 million shares at a later date and at the current share price of £17.65 (HK$177) the 600,000 that he will receive are worth about £10.5 million.

The annual report published on Tuesday shows that Bailey was paid £3.5 million last year – up from the £1.9 million the previous year . While he waived his entitlement to any annual bonus for the year, his total was boosted by a £1.4 million payout from a further award of shares in 2014. Bailey could have received a maximum of 125,000 shares from that particular award, but is instead receiving 77,000 after the performance of the company was taken into account.

In 2014 the company had endured a bruising annual meeting with its shareholders, who voted against its remuneration report to protest about Bailey’s pay. His pay deals also include a £440,000 allowance to cover clothes and other items.

Bailey’s salary will remain at £1.1 million when he becomes president next month, following a year in which underlying profits fell by 21 per cent.

The chairman, Sir John Peace, said in his introduction to the annual report: “Since taking on the combined role of chief creative and chief executive officer, Christopher has made significant progress against a backdrop of challenging market conditions.”

The report spells out changes to pay deals at Burberry for the future to reduce “the overall maximum potential quantum”: maximum bonuses will be 200 per cent of salary for executives rather than 225 per cent and maximum relocation bonuses cut to £200,000 from £250,000.