Burberry's investors said to be outraged by Christopher Bailey's pay cheque
There's no denying the strength of Bailey's curriculum vitae or academic achievements – back in 1990, he finished studying at one of the oldest educational institutions in the UK – the University of Westminster – and in 2006 and became its honorary doctorate. In 2009 he was awarded an honorary patron of Dublin's Trinity College. In 1994, Christopher graduated from the Royal College of Art, which in 2004 named him an honorary fellow, and in 2013 awarded the title of honorary doctor.
All of these accolades were discreetly benefitting the Burberry fashion house in the 13 years Bailey has been working there – combining creativity with diligence and shrewd business acumen and eventually going on to become its creative director, and most recently being promoted to CEO. His latest career climb has now proven itself to be a little bit of a catch 22 for the 43-year-old fashion pioneer, as Burberry's investors have started to question the the cash allowance and shares he is set to receive. Perhaps a payrise alone would have not rocked the boat, but the lump sum payment he is set to receive for his dedication to the company – often referred to as "golden handcuffs" by the finance industry – is being disputed by three influential advisory bodies who have raised concerns over Bailey's share award, with the Institutional Voting Information Service (IVIS) issuing an "amber" top warning on Burberry's executive pay arrangements ahead of the luxury retailer's annual meeting this coming Friday.
Bailey's salary package has been increased to £1.1m a year, and he has been awarded a £440,000 cash allowance and will receive company shares worth more than £26 million from next year.
The Yorkshire-born creative took the CEO reigns from Angela Ahrendts on May 1, who left the company to man Apple's retail business. Ahrendts received a £387,000 annual cash allowance, which was substantially smaller than Bailey's reported £440,000 allowance. This plus the share amount has angered investors, who are keen to investigate the rather steep increment.
Christopher Bailey has creative charge of all aspects of the British heritage brand's collections, and has indicated that he will donate 10% of his salary to the Burberry Foundation, a charity he co-founded in 2008.
Whether or not the noise from investors will see his arguably well-deserved bonus (he has after all completely revamped the fashion house, bringing it to the forefront of the digital era and substantially increased its profit) decrease is a question that will no doubt be answered during the series of meetings, which will now take place at Burberry HQ.