Burberry has cut its chief executive’s bonus to zero following a torrid year for the luxury brand in which profits plunged by 40pc.
Jonathan Akeroyd, who joined Burberry as chief executive in April 2022, was forced to forgo his bonus last year after failing to meet performance targets, the company’s annual report said.
It means Mr Akeroyd will receive total pay of £1.3m for the year to April, a 70pc drop on a year earlier when his remuneration totalled £4.3m. His pay package includes a salary of £1.1m with the remainder made up of pension and other benefits.
Shares in Burberry have fallen by more than 50pc over the past year, making it one of the worst performers in the FTSE 100, as it suffers a slowdown in demand from Chinese shoppers which has hammered profits.
Meanwhile, debt has more than doubled to £1.1bn, which the company has blamed in part on lower earnings.
Burberry measures executive bonuses based on the company’s operating profit as well as its performance on areas including strategy, brand, and environmental and social targets.
Had the company hit its targets in the most recent year, Mr Akeroyd would have been entitled to a maximum annual bonus of 200pc of his base salary, worth as much as £2.3m.
Danuta Gray, chairman of Burberry’s remuneration committee, said: “In light of the business performance and broader shareholder experience, the Committee and Jonathan Akeroyd agreed that it would not be appropriate for him to receive an annual bonus for FY 2023/24.”
It comes amid speculation earlier this year that Burberry was sizing up a potential replacement for Mr Akeroyd. However, a spokesman denied the reports. They said: “We don’t comment on unsubstantiated speculation but to be clear Jonathan has the full backing of the Burberry board.”
Despite Mr Akeroyd’s bonus being cut to zero Burberry’s chief financial officer Kate Ferry was paid an annual bonus of £121,500, bringing her total pay package to just under £2m.
Ms Gray said the company’s remuneration committee considered this “appropriate” because of progress made against strategic objectives and “the excellent broader contribution” made by Ms Ferry to the company.
Mr Akeroyd, who was chief executive of Versace before joining Burberry, has also criticised the so-called tourist tax for hitting spending among overseas visitors to the UK. The tourist tax was introduced in 2021 by then-chancellor Rishi Sunak when he scrapped VAT-free shopping for overseas visitors.
Mr Akeroyd said in May: “The UK continues to significantly underperform continental Europe. Obviously, the absence of tax-free shopping is playing a part in that.
“London is really losing out to Paris and Milan, and the gap is widening.”
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