Ralph Lauren is going to have to work harder for his bonus and restricted stock options next year.
In a regulatory filing with the Securities and Exchange Commission, Polo Ralph Lauren Corp. said that its chairman and chief executive officer, starting in fiscal 2009, will be entitled to a bonus “only if 80 percent, rather than 50 percent, of the performance target had been achieved.” The filing said the changes put Lauren’s compensation arrangements in line with those of “other members of senior management.”
Lauren’s annual stock option grants were reduced to 100,000 stock options from 150,000, according to the filing. In addition, the term for his stock options was reduced to seven years from 10 years, in line with the term for all management stock options.
Additionally, restricted stock units granted to the chairman, which were reduced to 75,000 RSUs from 100,000, will be performance- rather than time-based, the filing said.
It was disclosed in the proxy statement filed by the company earlier this month that Lauren has a new five-year employment agreement that began on March 30. His new base salary is $1.25 million, a $250,000 raise.
In the proxy, the company said Lauren’s total compensation for the year ended March 29 was $34.2 million, which included among other compensation a base salary of $1 million, no bonus and stock awards of $16.2 million. The total represents a 32 percent gain from the prior year, when total compensation was $25.9 million.
Last year, Polo’s net income increased 4.7 percent, to $419.8 million, or $3.99 a diluted share, as net revenues grew 13.6 percent to $4.88 billion.