Dov Charney’s 2013 compensation is likely to draw less attention at American Apparel Inc.’s annual meeting than the company’s high debt level.
Charney, chairman and chief executive officer of American Apparel, saw his reported compensation last year drop almost 93 percent — to $1.1 million from $14.5 million in 2012 — as $12.5 million in stock awards granted in the earlier year diminished to zero.
According to the Los Angeles-based company’s definitive proxy filed with the Securities and Exchange Commission Monday, Charney’s base salary last year increased 4 percent to $832,000 from $800,000 in 2012, while his cash bonus — tied to factors including sales, profitability and debt — fell 82 percent to $216,000 from $1.2 million in the prior year. Last year’s amount represented 26 percent of Charney’s base salary, versus 150 percent, the maximum provided for, in the prior year.
Between salary and bonus, his cash compensation dropped 47.6 percent to $1.05 million from $2 million.
Because of fluctuating stock prices and vesting requirements, stock awards aren’t necessarily realized but the SEC requires that they be reported at grant date fair value. In Charney’s case, the $12.5 million granted in 2012 included shares to be realized upon the achievement of performance targets and shares tied to the antidilution provisions of his employment agreement with the company. According to the proxy, Charney is no longer eligible for about one-third of those amounts.
Following the completion last month of a public offering of an additional 61.6 million shares of common stock sold at 50 cents a share, the proxy lists Charney as the company’s largest shareholder, with 27 percent of the shares outstanding, followed by Switzerland’s FiveT Capital Holding, with a 13 percent stake, and Lion/Hollywood LLC, with a 12 percent stake.
Lion’s shares include warrants exercisable to purchase more than 24.5 million shares. Lion continues to have the right to designate two seats on American Apparel’s board as well as a board observer. It hasn’t acted on that prerogative since March 2011, when Lyndon Lea and Neil Richardson resigned as directors and Jacob Capps as board observer.
The company’s annual meeting will be held in New York on June 18. According to its annual report, filed on April 1, its long-term debt, excluding current maturities, stands at $218.9 million, up from $112.9 million a year earlier, while its cash position fell to $4.9 million as of Feb. 28. It has $3.3 million of borrowing capacity through facilities with Capital One and Bank of Montreal. In November, it added $5 million to its $4.5 million loan from Lion/Hollywood, at which time the interest rate on the loan rose to 20 percent a year from 18 percent.
In honor of Rihanna’s 30th birthday, we took a look back at an interview with the Barbados-native when she was just 18 years old. Here, she talked about her second album, “A Girl Like Me” in 2006. “I want to be me. I want people to fall in love with who Rihanna is, and that’s why I want the album to be about me so people can really find out who this girl Rihanna is, because they only know the ‘Pon de Replay’ girl.” Fast forward 12 years, and she’s released six more albums and has become a powerhouse in both the fashion and music industries. Happy birthday, @badgalriri 🎈(📷: Pavel Antonov) #wwdarchive
For @simonerocha_‘s fall show, hairstylist @jamespecis created a look inspired by the painter John Constable. Models’ hair was pulled back, tied into knots and topped off with a bow. (📷: @kukukuba) #wwdbeauty #lfw
Queen Elizabeth made a surprise appearance at @richardquinn1's London Fashion Week show to present the designer with the inaugural Queen Elizabeth II Award for British Design. The new award will be handed out annually to an emerging British fashion designer who shows exceptional talent, while demonstrating value to the community and sustainable policies. #wwdfashion #lfw (📷: @giovanni_giannoni_photo)