The pay and the perks at the top are good — very good.
Sixty-seven fashion executives logged compensation of more than $5 million last year, according to a WWD analysis of publicly traded brands and retailers in the U.S.
A lot of that compensation is just paper, though — stock and option grants made up the majority of many executives’ pay and pushed total compensation for the group to $880.6 million. While that’s a large number by any measure, it completely depends on how much the 67 executives earn from cashing in all those options and grants. It could be less. RELATED STORY: Compensation Close-up, a Look at Pay at the Top >>
The key pay-package trends for last year included:
• J.C. Penney Co. Inc.: The reinventing retailer dominated the leaderboard with chief executive officer Ron Johnson taking the top spot as a large options payout pushed his compensation to $53.3 million. Three other current and former Penney’s executives were in the top 10.
• Chief executive officers: most of the top earners are ceo’s. Exceptions include Reed Krakoff, president and executive creative director at Coach Inc.; Daniel Walker, chief talent officer at Penney’s; Donald Brennan, chief merchandising officer at Kohl’s Corp., and Kathryn Tesija, executive vice president and president of merchandising at Target Corp.
• Fatter paychecks: compensation jumped 30.9 percent to $738.9 million from 2010, excluding the seven executives who were new to their jobs last year.
Experts attribute much of the increase in pay to the supply-and-demand economics of the c-level employment market. To put it simply: there are too many companies desperate for top-notch talent — and too little of it. With so few true executive superstars around, companies looking to recruit them have to pay up. Companies also have to make up for the pay those executives leave behind in their old jobs, since they likely were highly paid already.
“You’re seeing an option play that’s extraordinary,” said Les Berglass, chairman of executive search firm Berglass + Associates. “For the past three or four years, boards could get away with buying talent. Now, not only do they have to buy the talent, they have to buy out their options.”
Large fashion companies are increasingly seen as needing generalists, executives able to oversee sprawling corporate empires and work with a range of strong personalities with very different skills.
“You’re buying a different breed of thoroughbred that will be much more expensive,” Berglass said. “The bottom line is that the marketplace defines the compensation, not edicts from the government or a board….You can’t force successful executives into taking a job; you have to give them more money.”
Penney’s, which last year assembled a team to reinvent the struggling 1,100-door chain, went on the biggest poaching expedition last year.
Johnson took his chief talent officer Daniel Walker from Apple Inc. and convinced Michael Kramer to give up his gig as ceo at Kellwood Co. to be the retailer’s chief operating officer. Johnson also dipped into Target Corp. for Michael Francis, but the association didn’t last, and Francis abruptly left Penney’s in June.
Francis offers a good case study for just how slippery the official compensation figures can be. Had he stayed at Penney’s, Francis would have rated as the third-highest-paid fashion executive, with compensation of $44.7 million. But since he left, his $32.1 million in stock awards never had a chance to vest and were never realized. He also had to give back a portion of his $12 million signing bonus.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast