The chief executive of Burberry, Christopher Bailey, has received a 75 per cent pay cut after failing to meet the company's profit target last year.

Mr Bailey will be paid a total of £1.9 million, down from £7.5 million in the previous year, following a disappointing 12 months for the luxury fashion group.

Mr Bailey’s salary remains flat at £1.1m, but he will not receive a bonus as the company’s pre-tax profit “was below the threshold target set by the remuneration committee at the start of the year”, according to the company’s annual report.

He will receive a further £330,000 in pension payments and £464,000 in benefits and allowances - nearly all of which are cash allowances.

Burberry's chief financial officer, Carol Fairweather, and its chief operating officer, John Smith, were also not paid bonuses or share rewards, and received pay cuts of 59 per cent and 47 per cent respectively.

Shares in Burberry have tumbled 35 per cent in the past year as the company struggles to deal with a slowdown in demand from China and Hong Kong, which account for about 40 per cent of its sales.

Last month it announced a 7 per cent fall in full-year profits and said that profits in 2017 would be at the bottom end of expectations, with the “challenging environment for the luxury goods sector” continuing. In response, Mr Bailey outlined a reform of the business including a £100m cost-cutting drive, a share buyback scheme, and promises of greater productivity through online expansion.

In addition to the group’s poor financial performance, Mr Bailey has come under fire from investors for his dual role in the company. He holds the posts of chief executive officer and chief creative officer, and some investors have said they do not believe it is feasible for him to do both.

“They should let Bailey do what he does best, which is design,” said one top-20 investor. “They need to make sure they use the real skills that he has. It feels like he has been overstretched in both positions.”

"Our overall approach to incentive structures for all staff, including senior management, is based on performance," chairman John Peace said in the report. "When the business does not perform as well, this has an impact on what we pay to our staff. And when the share price falls as it has in the past year, this has a substantial impact on historical share awards.

- (Financial Times/Bloomberg)