Joshua Schulman Receives 4.8 Billion KRW in 9 Months as New CEO
Burberry to Lay Off One-Fifth of Employees by 2027
British luxury brand Burberry has announced plans to lay off 1,700 employees worldwide citing "management crisis," but controversy has arisen as the newly appointed Chief Executive Officer (CEO) received a massive compensation package worth 4.8 billion KRW (approximately $3.5 million) in just nine months.
According to the British daily The Guardian on June 2 (local time), Burberry recently revealed in its annual report that Joshua Schulman, who was appointed CEO last July, received a total compensation of 2.6 million pounds (about 4.8 billion KRW) over nine months. Schulman's base annual salary is 1,356,000 pounds (about 2.5 billion KRW). In addition, he received a bonus of 1.2 million pounds (about 2.2 billion KRW), and the company also covered his relocation costs of 120,660 pounds (about 225 million KRW) for moving from the United States to the United Kingdom. Schulman was also provided with 135,171 pounds (about 250 million KRW) to secure a new home, and will receive an additional monthly housing allowance of 25,000 pounds (about 47 million KRW) for over a year. So far, he has already received five months' worth of this housing allowance.
If Schulman meets this year’s management targets, he could receive an additional bonus of up to 5.6 million pounds (about 10.45 billion KRW). If he succeeds in doubling Burberry’s share price within the next three years and returning the company to the Financial Times Stock Exchange (FTSE) 100 Index, he will receive a further bonus of 3.6 million pounds (about 6.72 billion KRW).
Schulman, who previously served as head of American premium fashion brands Coach and Michael Kors, was recruited last year to turn around Burberry’s struggling performance. Since his appointment, Burberry’s share price has risen by about 50%. However, risks remain, including former U.S. President Donald Trump’s planned import tariffs and reduced consumer spending in both the U.S. and China.
Last July, Burberry also paid a large severance package of about 1.5 million pounds (about 2.8 billion KRW) to former CEO Jonathan Akeroyd, who stepped down to make way for Schulman. This amount includes one year’s salary, pension, and cash benefits. Akeroyd, who was appointed in 2021, left Burberry after less than three years.
As it became known that Burberry paid massive compensation to both its former and current CEOs, criticism has mounted amid the company’s severe management difficulties.
Burberry swung from a profit of 383 million pounds (about 714.5 billion KRW) last year to a loss of 66 million pounds (about 123.1 billion KRW) this year. In response, Burberry recently announced a management reform plan to lay off 1,700 employees worldwide?equivalent to one-fifth of its global workforce?by 2027. The company plans to save an additional 60 million pounds (about 111.9 billion KRW) through this large-scale layoff, on top of its existing cost-cutting plan of 40 million pounds (about 74.6 billion KRW).
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