Burberry’s first annual general shareholders meeting here was a quiet affair, with all 14 resolutions — including a potentially explosive one regarding management pay packages — passed with nearly 100 percent of the available votes.
During the 17-minute meeting, shareholders gathered in a small room next door to the headquarters of Burberry’s financial public relations company but asked no questions. About 45 people attended, approximately one-third members of the press.
As reported Tuesday, the National Association of Pension Funds had urged its members to vote against the proposal regarding management pay packages. The association believes Burberry’s executive pay packages, especially those for chief executive Rose Marie Bravo and Thomas O’Neill, president worldwide, are “extremely generous” by U.K. standards. A spokesman said in a telephone interview that the association “could not condone their largesse.”
Including a bonus that amounted to 86 percent of her base salary, Bravo took home a total of $9.2 million in the fiscal year that ended in March, as reported.
But there was never any doubt that the resolution regarding management remuneration packages would pass. Great Universal Stores still holds a 77.5 percent stake in Burberry. The remaining 22.5 percent is held by independent and institutional shareholders.
The measure passed with 96.1 percent of votes in favor and 3.9 percent against. Fifty-five percent of the non-GUS shares were voted, 70 percent of them in favor and 30 percent against.
No one was surprised by the outcome. Burberry chairman John Peace stood by the company’s management pay policy. “We have a remuneration policy designed to attract the best possible people, and we set all of this out last year before going public. And goodness me, the Burberry team has certainly been successful in their work,” he said in an interview after the meeting.
Bravo declined to comment on the salary flap, but said, “I’m very happy doing what I’m doing, and look forward to continuing. I’m very proud of the accomplishments we’ve made, and I think Burberry’s figures and business speak volumes about the work we’ve done so far.”Even the spokesman for the NAPF said he was not surprised by the outcome of Tuesday’s vote.
“We know that GUS still has a majority stake in Burberry. Also, Burberry has done extraordinarily well over the past year, and today’s vote was most probably a reflection of management’s performance. However, the fact that 30 percent of votes were against the resolution shows there is an interest in good corporate governance.”
The spokesman added the association still wants Burberry to state publicly its internal profit targets that are linked to managers’ performance bonuses.
Burberry reported Monday that revenues in the three months ended June 30 increased 18 percent, with retail sales up 33 percent, thanks to a raft of store openings in the past year and last year’s acquisition of the Burberry distributor in Korea.
Meanwhile, Bravo brushed aside a report from The Sunday Times earlier this year that she is under pressure from Burberry’s largest shareholders to sign on for another three years after her current contract expires in the summer of 2005.
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