It seemed like Burberry got two for the price of one when they hired onChristopher Bailey as the CEO and Creative Director of the company afterAngela Ahrendtsleft for Apple. Bailey was the first fashion designer to cross over as CEO at a publicly-traded fashion company, and the move was heralded favorably both by shareholders within the company and the industry as a whole. Along with the new role came a staggering pay package, including a stock payout worth $34 million on top of a multi-million dollar salary and annual cash allowance.
As of last Friday, Burberry's shareholders are no longer supporting Bailey's pay package. At the company's annual shareholder meeting last Friday, the stock payout that Bailey was awarded was rejected by 53% of the shareholders in a non-binding vote.
Business of Fashion's EIC, Imran Amed, wrote an op-ed on the whole situation exploring the reasons behind the shareholder revolt. Bailey's pay package was said to have been awarded in a move to keep Bailey with Burberry—he wasbeing courted by other companies at the time and Burberry knew that Bailey could get a much larger pay package outside of the UK. Burberry's chairman John Peace told BoF that Ahrendts was paid over $60 millionwhen she switched to Apple and there was no way that Burberry could match that amount.
Burberry wouldn't have been able to survive if they lost both Ahrendts and Bailey at the same time, so they padded Bailey's pay package with as many incentives as they could. Now, Amed points towards those same incentives as the reason why the board is up in arms about Bailey's pay. The incentives were rewarded from the get-go without any performance strings attached.
According to Amed, when Bailey was asked if he'd give up some of his stock payout to soothe shareholders, he said that "it's not about giving something up," indicating that he has no plans to back down on his pay package. At this point Amed put his two cents in, basically telling Bailey to just give up his money already.