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.
“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