Burberry to cut dividend payouts in the wake of coronavirus

Burberry to cut dividend payouts in the wake of coronavirus
Last year’s full dividend payout cost Burberry £171 million.

Burberry is reportedly set to cut its dividends due to the coronavirus pandemic while also holding talks with shareholders over changes to its executive pay scheme.

According to The Sunday Times, the luxury retailer’s final payout would be 22.5p, down from 31.5p and bringing an end a 10-year run of annual dividend growth.

Last year’s full dividend payout cost Burberry £171 million.

It comes as Burberry’s in-store sales plunged by 30 per cent in the first three months of the year, when lockdowns were being imposed across China and then Europe.

Meanwhile, the fashion house is reportedly in talks with investors about changes to the way in which chief executive Marco Gobbetti and other members of executive management are paid.

The Sunday Times reported that proposals include replacing the traditional long-term incentive plan with a restricted share plan, where a lower number of shares are awarded but often without performance criteria.

Gobbetti has already agreed to a 20 per cent cut in his £1.1 million salary until June. He was pad £3.9 million for the previous financial year.

Should the proposals be agreed, Gobbetti’s long-term award of shares could probably be halved from the current 325 per cent of salary.

Source – Retailgazette.co.uk