Mulberry boss incentive attracts PIRC anger
British luxury retailer Mulberry has finalized plans to introduce a long-term remuneration package worth £2 mn ($3.1 mn) for its directors, despite criticism from shareholders.
The firm’s senior management team – lead by chief executive Bruno Guillon – will be given an option on 171,500 shares after the scheme was confirmed at Mulberry’s AGM this week, though the company’s shares were reported to be 15p weaker at 985p.
The option will be made available only if Mulberry’s management meets ‘challenging’ five-year targets, with the firm’s representatives arguing that the scheme aligns with shareholders’ best interests.
But influential shareholder body PIRC had accused the retailer of ‘serious governance failure’ ahead of the AGM for not opening the issue to a shareholder vote, in a statement that opposes the remuneration plans. As a shareholder research and consultancy group, PIRC advocates transparency and corporate responsibility. The group adds that despite it not being a requirement for an AIM-listed company to publish a remuneration report, it is ‘considered to be best practice.’
Guillon joined the British company from French luxury boutique Hermès last year and has worked on a number of initiatives to boost the company’s global reputation. On joining the accessories retailer, he was awarded 200,670 shares worth £3.4 mn at a heavily discounted rate.
The new remuneration package was reportedly introduced following a slump in the value of a previous scheme introduced in December 2012, after Mulberry’s share price fell by 57 percent from its peak in May 2012.
In the year leading up to March 2013, Mulberry’s profits fell by £10 mn as total revenue for the group fell from £168.5 mn to £165.1 mn over the course of the year. Wholesale revenue also took a 16 percent hit, falling to £57.9 mn.