- Burberry’s shares jumped over 2 per cent in the last session after it appointed former Versace boss Jonathan Akeroyd.
- Jonathan Akeroyd’s compensation package includes £1.1 million annual salary and a share plan which is equivalent to 162.5 per cent of his salary.
UK-based luxury fashion house Burberry PLC (LON: BRBY)’s shares jumped over 2 per cent after the announcement that the company had hired a competing luxury fashion house’s head, Jonathan Akeroyd, as its Chief Executive Officer (CEO).
At the end of the day, Burberry was the second-highest riser on the FTSE 100 index, which it is a constituent of, following the news.
Burberry PLC’s (LON: BRBY) share price performance
Burberry’s shares closed at GBX 1,872.00, up by 2.32 per cent on 20 October 21. The company’s market cap stands at £7,582.38 million and its one-year return is at 22.11 per cent as of Wednesday.
(Image source: Refinitiv)
Burberry’s new CEO
Jonathan Akeroyd will join as the new CEO and executive director of Burberry, effective 1 April next year.
Akeroyd is being offered a salary of £1.1 million per annum and a share plan which is equivalent to 162.5 per cent of his annual salary.
Burberry has also agreed to give Akeroyd about £6 million in cash and share awards over the next four years, over and above this salary and share package, due to leaving his cash and other incentives at Versace.
Mr Akeroyd was the CEO at Versace since 2016, prior to which he was the CEO at British fashion company Alexander McQueen from 2004 to 2016.
He will succeed Marco Gobbetti, who is the current CEO at Burberry and will step down from this role on 31 December. Mr Akeroyd’s appointment comes after Mr Gobbetti announced his departure from Burberry to head an Italian luxury brand, Salvatore Ferragamo.
How will Burberry be impacted by the board change?
Burberry stands to gain following the appointment of the Versace boss, who is an experienced leader and could help in turnaround the company. In Burberry’s July update, the company had posted a strong recovery, with sales returning to pre-pandemic levels, driven by a younger demographic and demand in Asia.
Akeroyd had earlier helped in the turnaround of fashion house Alexander McQueen during his tenure there. He had also helped oversee Versace’s sale to US fashion group Michael Kors back in 2018. Michael Kors brand is now called Capri Holdings.
Mr Gobbetti announced his departure mid-way of Burberry’s multi-year turnaround plan, the long transition period before Akeroyd can take over, indicates any new strategy he initiates would take long to become visible. Analysts estimate an updated strategy may not be presented until third or fourth quarter of 2022, which would, therefore, further delay turnaround plans.