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.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)