Wednesday, January 20, 2021
  • About
  • Advertise
  • Careers
  • Contact
Pension Changes
  • Home
  • Government Policy
  • Pension Changes
  • Pension Information
  • Pension Rights
  • Retirement Pension
No Result
View All Result
Pension Changes
Home Pension Policy

COVID-19 to Dent Burberry Bonuses, Salaries This Year and Next – WWD

June 16, 2020
in Pension Policy
COVID-19 to Dent Burberry Bonuses, Salaries This Year and Next – WWD
0
SHARES
6
VIEWS
Share on FacebookShare on Twitter

LONDON — COVID-19 has upended Burberry’s salary and bonus structure for the most recent and current fiscal years, while the company has also re-jigged its pension policy and executive share plans to align them with those of its luxury peers.

Burberry revealed in its latest annual report, which was published last week, that the coronavirus has had a drastic impact on salaries and bonuses in the last fiscal year, 2019-20, while the company will continue to feel the reverberations from lockdown and store closures in the current year. Burberry’s fiscal year ends on March 31.

As reported, Burberry rejected the British government’s help in the wake of the coronavirus, maintaining base pay for all employees unable to work remotely, and slashing top bosses’ salaries by 20 percent for the April-to-June period.

The company’s chairman and the non-executive directors did likewise with their fees, and the equivalent cash amount from that reduction has been donated to the Burberry Foundation COVID-19 Community Fund.

In the annual report, Burberry said because incentive targets for fiscal 2019-20 had not been met due to store closures worldwide, there will be no bonus payments for the company’s executive directors, and 2017 awards under the Burberry Group plc Executive Share Plan 2014 will not vest.

In addition, senior staff, including chief executive officer Marco Gobbetti and chief operating and financial officer Julie Brown, will not receive a salary increase for the current 2020-21 fiscal year.

According to the report, their salaries will continue to be 1.14 million pounds, and 725,500 pounds, respectively. There will also be no increase in fees for the chairman or the non-executive directors this year.

The criteria for annual bonuses have also been modified in the wake of COVID-19. In the current fiscal year, the maximum annual bonus that can be earned will be limited to 50 percent of base salary, or one-quarter of the usual 200 percent.

The remuneration committee said it would determine the annual bonus for fiscal 2020-21 at the year-end next March, “taking into account performance against strategic objectives set around the company’s response to, and recovery from, COVID-19.”

The committee will look at Burberry’s cost mitigation program; working capital management; supply chain management, and its strategy to build a more sustainable future, primarily focusing on product sustainability and carbon reduction, as well as overall business performance and shareholder experience.

In addition to the changes to salaries and bonuses, Burberry has recast its executive share plan program and its pension scheme in an attempt to bring the company in line with its luxury peers, and with other U.K. companies of similar size and status.

In the annual report, the remuneration committee argued that the new and “restricted” plan, known as the Burberry Share Plan, “fits better with the characteristics of the luxury industry,” compared with a traditional long-term incentive plan.

“Many of our global competitors — predominantly non-U.K. based, and privately owned businesses — use restricted shares to reward their leaders,” the committee said.

Under the new plan, executive directors will receive awards with a lower value than under the original plan. Those awards will also be subject to performance “underpins,” according to Burberry.

The committee said the new plan is better because it prevents executives from potentially making moves that “only enhance short-term revenues and profit, such as expanding distribution into non-image-building stores or the use of excessive discounting, which can be damaging for the brand and long-term value for shareholders.”

The committee believes the new plan will encourage management to focus on “executing the transformation strategy to position Burberry firmly as a luxury brand; to provide the flexibility to make the right investments at the right time, and to discourage the use of [certain moves] to increase revenue and profit in the short-term at the expense of the long-term shareholder experience.

The maximum award under the new policy for the ceo will be 162.5 percent of salary and the maximum award for the chief operating and financial officer will be 150 percent of salary. This is half the level of awards under the current share plan, and reflects “best practice and shareholder expectations,” Burberry said.

The new Burberry Share Plan awards will not pay out if the company has underperformed and if vesting is not justified. Awards will be subject to a holding period so that the total time horizon before any potential sale of shares is five years for the entire award.

Burberry also plans to reduce its pension benefits for executive directors, bringing them in line with the rates available for the wider workforce.

The maximum pension allowance for any new executive director appointments to the board is being further reduced to align with the maximum employer pension contribution rate available to the majority of the U.K. workforce, or 6 percent of salary.

The new measures will be voted upon during Burberry’s annual general meeting next month in London.

As reported last month, COVID-19 dragged down sales and profits at Burberry Group in fiscal 2019-20, but the company said it was already seeing a “strong rebound” in some parts of Asia, and its balance sheet was robust enough to push through the difficult times.

Revenue in the 12 months to March 31 was down 3.2 percent to 2.63 billion pounds at constant exchange, and fell 4 percent at actual rates. Reported operating profit, calculated with new accounting measures, fell 57 percent to 189 million pounds.

The company declined to offer any outlook for the current year, but it said the first quarter would be badly impacted by store closures.

— to wwd.com

Related posts

Chancellor Rishi Sunak rejects wealth tax hike

Chancellor Rishi Sunak rejects wealth tax hike

January 20, 2021
Australia and Canada demand end to UK ‘frozen’ pensions

Australia and Canada demand end to UK ‘frozen’ pensions

January 15, 2021
Previous Post

Colombia’s Beleaguered President Gets Approval Bump During Pandemic

Next Post

Dutch political parties stay positive on new pensions agreement | News

Next Post
Dutch political parties stay positive on new pensions agreement | News

Dutch political parties stay positive on new pensions agreement | News

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

How State Pension rule changes coming into effect today could delay your retirement

How State Pension rule changes coming into effect today could delay your retirement

6 months ago
FG defaults in pension remittance for six years – Punch Newspapers

FG defaults in pension remittance for six years – Punch Newspapers

7 months ago
How much state pension will you get in 2020? – Which? News

How much state pension will you get in 2020? – Which? News

11 months ago
EU Court to Consider if an Irish Pension can be Exempted from a UK Bankruptcy Estate

The Bauer judgment – CJEU introduces new poverty threshold for pension protection

8 months ago

FOLLOW US

  • 79 Followers
  • 27.6k Followers
  • 40.7k Subscribers

BROWSE BY CATEGORIES

  • Government Pension Policy
  • Pension Changes
  • Pension Information
  • Pension Policy
  • Pension Rights
  • Retirement Pension
  • Uncategorized

BROWSE BY TOPICS

2021 2021 Pensions auto-enrolment age 18 auto enrolment pension contributions 2021/22 auto enrolment rates 2020/21 auto enrolment rates 2021/22 cashing in pension at 55 cashing in pension calculator cashing in small pension pots CCP retirement check my state pension Disabled pensions drawdown employer pension contributions 2021/22 government policy examples uk list of government policies uk minimum pension contributions 2021 minimum pension contributions 2022 new state pension Pension age pension issues pension ombudsman pension plan pension regulator Pensions Advisory Service Pensions Brexit pension scheme uk Pensions outlook retirement 2 million scams scheme funding Single mothers pensions State Pension State Pension age state pension changes state pension forecast State Pensions State triple lock taking pension at 55 the pensions regulator Therese Coffey uk pension age UK State Pension uk state pension age what is government policy uk

POPULAR NEWS

  • Multiemployer pension reform not happening this year

    Multiemployer pension reform not happening this year

    5 shares
    Share 0 Tweet 0
  • Exit payment cap: Implications for the LGPS

    0 shares
    Share 0 Tweet 0
  • Public Service Pensions Update | October 2020

    0 shares
    Share 0 Tweet 0
  • NEST: More than a pension | Country Report

    0 shares
    Share 0 Tweet 0
  • Builders were not self-employed, rules employment tribunal

    0 shares
    Share 0 Tweet 0

Follow us on social media:

Recent News

  • Brexit and Covid-19 Universal Credit changes in 2021, including to benefits and pensions
  • Chancellor Rishi Sunak rejects wealth tax hike
  • The big Brexit changes to Universal Credit, benefits and pensions starting this January

Category

  • Government Pension Policy
  • Pension Changes
  • Pension Information
  • Pension Policy
  • Pension Rights
  • Retirement Pension
  • Uncategorized

Recent News

Brexit and Covid-19 Universal Credit changes in 2021, including to benefits and pensions

Brexit and Covid-19 Universal Credit changes in 2021, including to benefits and pensions

January 20, 2021
Chancellor Rishi Sunak rejects wealth tax hike

Chancellor Rishi Sunak rejects wealth tax hike

January 20, 2021
  • About
  • Advertise
  • Careers
  • Contact

© 2020 Please contact us on partnership@pensionchanges.co.uk if you would like to reach our audience.

No Result
View All Result
  • Home

© 2020 Please contact us on partnership@pensionchanges.co.uk if you would like to reach our audience.