Burberry Faces Investor Backlash Over CEO's Potential Pay Package

Burberry is confronting an investor revolt ahead of its annual meeting this week, as shareholder advisors recommend voting against a proposed executive pay plan that could substantially boost CEO Joshua Schulman's potential bonus.

Institutional Shareholder Services (ISS), a prominent shareholder advisory firm, has advised investors to oppose the new compensation structure. Under this plan, Schulman could be eligible to receive shares in the luxury fashion house valued at up to 300 percent of his base salary, contingent on the company's performance. This would be in addition to a restricted share award scheme granting him shares worth up to 150 percent of his salary, potentially totaling 450 percent.

Last year, Schulman received shares equivalent to 167.5 percent of his base pay. The proposed scheme could yield a payout of approximately £12.2 million next year if performance targets are met and Burberry's share price increases by 50 percent. For the fiscal year ending March, Schulman's total earnings were £4 million.

ISS acknowledged Burberry's argument that executive compensation should align with that of global luxury sector rivals and reflect high salaries in the U.S. market. However, the firm noted that the new scheme includes restricted shares that offer protection against downside risk, implying that the penalties for underperformance are insufficient.

Burberry's share price has seen a decline of 15 percent year-to-date, trading at £10.81. Despite this, the stock is up 56 percent since July 2024, when Schulman joined the company, coinciding with a renewed emphasis on the brand's British identity.