Come on Burberry, time for a reality check
Outlook Burberry is another successful retailer, even if the shares have moved off the express train and on to a branch line.
Unfortunately, like too many successful public companies, its directors also appear to believe that this gives them carte blanche to thumb their noses at what is considered best practice on issues such as pay – not to mention common sense.
Hence the nonsense of the £27m package of pay, perks and share options handed to new chief executive Christopher Bailey.
Burberry has sought to justify this to shareholders by arguing that it’s the going rate: look at Prada’s Miuccia Prada, who made £11.7m in 2013.
It doesn’t take the best brains of a City institution, with all their double firsts and other academic baubles, to counter that one. Parents up and down the country do it every day when their children do silly things and then claim they were only doing what little Johnny told them to.
For those shareholders still credulous enough to buy into the sort of specious rubbish Burberry’s peddling, it goes like this: “If little Johnny told you to jump of a cliff would you?”
Unfortunately, for the long-term health and sensible operation of their investment, it will still be something of a miracle if more than 30 per cent vote against the company’s pay policy.
Burberry has endured, and ignored, similar revolts in the past. So nothing is likely to change, and despite Mr Bailey having little experience of running a company – there is a world of difference between being a “chief creative officer” and a chief executive – he will probably get his money.
Unless, of course, he makes a mess of things. In which case the company, if it doesn’t sell up, will say it has to hire a restructuring specialist at a similar price for his or her “unique skills”. In executive land heads you win, tails you win, and you’ll get a Royal Mint full of coins to toss, whatever you do.
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