NEW YORK — Ralph Lauren, the 72-year-old founder, chairman and chief executive officer of Ralph Lauren Corp., signed a new five-year employment contract on June 26 that will keep him at the helm of the company he founded until April 1, 2017, the end of the firm’s 2017 fiscal year.
The agreement replaces a contract that would have expired next April, at the conclusion of the company’s current fiscal year.
Lauren’s new compensation package is less weighted toward cash and more toward equity to be derived through stock and option awards.
Under his new contract, Lauren’s salary increases 40 percent to $1.75 million a year from its previous level of $1.25 million. His target and maximum cash bonuses — phrased as “nonequity incentive plan compensation” in proxies like the one filed by the company with the Securities and Exchange Commission Monday — are reduced to $9 million and $13.5 million, respectively, from their previous levels of $13 million and $19.5 million.
Ralph Lauren Corp. filed a Form 8-K with the SEC detailing the new arrangement Monday, the same day it submitted its definitive proxy with the SEC.
In the proxy, Lauren’s reported compensation for fiscal 2012 rose 22.3 percent to $36.3 million from $29.7 million in 2011. The cash portion of his pay was unchanged, with salary and cash bonuses remaining at $1.25 million and $19.5 million, respectively. The salary and bonus numbers have remained unchanged for the past three fiscal years, with the $19.5 million representing the maximum possible and 150 percent of the target amount. The company said in its proxy that net income before taxes last year rose 23 percent above fiscal 2011 results, which also generated maximum bonus payouts.
In fact, all of Ralph Lauren’s top executive officers but Lauren — Roger Farah, president and chief operating officer; Jackwyn Nemerov, executive vice president; Tracey Travis, senior vice president and chief financial officer, and Mitchell Kosh, senior vice president of human resources — were eligible for and received an additional 10 percent above the maximum provision, for respective bonuses of $9.9 million, $3 million, $880,000 and $880,000.
The boost in Lauren’s reported compensation last year came from a 77.6 percent advance in Lauren’s stock and option awards, which totaled $15.3 million versus $8.6 million in the prior year. Because of vesting schedules and fluctuating stock prices, these awards aren’t necessarily received by the executives earning them but are required to be reported at fair market value at the time they are granted.
With Lauren’s new salary higher and his potential cash bonuses lower, his eligibility for stock and option awards has been modified so that it is now based on value, rather than the previous configuration that was tied to a specific number of equity units. The target amount for grants will be $14 million. One-third of this amount will fall under options that can’t increase, while the remaining two-thirds will be for restricted stock units that can increase up to 50 percent if performance criteria are met or be reduced if they aren’t.
Farah’s reported compensation was down 1.2 percent last year to $19.3 million, while Nemerov’s rose 19.3 percent to $12.1 million.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews