Burberry's Christopher Bailey received 75 percent pay cut

London - Christopher Bailey, creative head and CEO of luxury fashion house Burberry, took an extraordinary pay cut of 75 percent for its fiscal year 2016, which say his total pay drop from 7.51 million to 1.89 million pounds.

Although Bailey's salary has remained approximately the same as a year before, sitting at 1.1 million pounds, the CEO's did not receieve any bonus or other incentive payments as Burberry earnings fell short of the company's target, according to Burberry's annual report for the year ended on March 31, 2016 published on Monday. In addition to his annual salary, Bailey was paid 330,000 pounds pension and 464,000 pounds in benefits, a big cut from the 7.5 million pounds pay check Bailey was given the year before, which included 5.7 million pounds in a cash bonus and share awards for 2014.

Bailey, along with Burberry's other senior level executives, will not receive a salary increased this year. "Our overall approach to incentive structures for all staff, including senior management, is based on performance," said Burberry's chairman, John Peace in the report. "When the business does not perform as well, this has an impact on what we pay to our staff."

Other executive directors, including finance director Carol Fairweather and Chief Operating Officer John Smith, did not receive any form of bonus or share awards for fiscal year 2016. This in turn saw Fairweather's pay drop by 1 million pounds to 683,000 pounds and Smith's salary decline from 1.52 million pounds to 813,000 pounds.

Burberry's Chief Executive and Chief Creative has also dedicated to defer vesting a million shares he received in 2013 when he was appointed chief executive and has asked the remuneration committee to wait a year. "Ahead of the new vesting date in July 2017, the committee and Christopher Bailey will again assess the extent to which vesting would be appropriate," wrote the heritage fashion house in the annual report.

News of Bailey's pay cut comes not long after the luxury fashion house annouced its cost-cutting scheme and share buyback plan to boost company shares, which has dropped approximately 35 percent over the past 12 months. Burberry has been struggling with a deep sales slump in Hong Kong and difficult trading condition in the United States, as its core Chinese customers continue to shift the way they shop.