The chief executive of luxury label Burberry will not receive a bonus for its latest financial year after its results underperformed during a “challenging” year.
The London-listed company said its remuneration committee and CEO Jonathan Akeroyd had jointly decided that he would not receive his bonus for the year to March 30, 2024.
The decision comes after Burberry’s revenue dipped below £3bn in the 12 months while its pre-tax profits were slashed from £634m to £383m.
Burberry said its financial year had been “challenging” for the brand with its results underperforming its original expectations.
Akeroyd’s base salary for the year totalled more than £1.1m while chief financial officer Kate Ferry received £675,000.
Burberry added that its executive directors would not receive an increase in their salaries for its new financial year.
The CEO’s maximum bonus is 200 per cent of his salary with 75 per cent dependent on the company’s adjusted operating profit and 25 per cent on their strategic objectives.
‘It would not be appropriate for Burberry CEO to receive a bonus’
In Burberry’s annual report, remuneration committee chair Danuta Gray said: “While we made progress on executing our strategy, delivering a creative transition during a global slowdown in luxury demand has been challenging.
Jonathan Akeroyd attends The Royal Academy of Arts summer preview party at the Royal Academy of Arts on June 15, 2022 in London, England. (Photo by Joe Maher/Getty Images)
“Revenue performance for all regions and digital was behind target. However, progress was made in enhancing our brand focus and elevation and we had positive reactions to key brand events during the year.
“We also made good progress during FY 2023/24 against our environmental and social targets, including phasing out the use of virgin cashmere in certain categories and progressing on our responsibly sourced and certified key raw materials.
“There was good progress on the CFO’s specific objectives in relation to cost strategy, including disciplined cost control throughout the business.
“The committee judged that progress was made on refining our brand image, evolving our product and strengthening distribution, resulting in some of the strategic objectives being partially met.
“However, 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.
“The committee determined that Kate Ferry would receive an annual bonus for FY 2023/24 of £121,500, representing 9 per cent of her maximum bonus.
“The committee considered that this level of bonus payout would be appropriate, taking into account the performance against strategic objectives (in particular her specific objectives in relation to cost strategy), as well as the excellent broader contribution Kate has made since joining Burberry last July.
“Kate will apply 50 per cent of her net bonus to acquire Burberry shares.”