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Continental Compensation

The 20 European fashion executives with the highest compensation packages.

The 20 European executives of public fashion and apparel companies with the highest remuneration packages.

Bernard Arnault still ranks as the richest man in France — and in fashion — with a net worth of about $7 billion, even though his take-home pay was a relatively paltry 1.42 million euros. As far as working stiffs, Rose Marie Bravo, ceo of Burberry, broke through the fashion industry’s silk ceiling to top the European executive compensation list this year, earning $9.2 million in 2002. She surpasses Tom Will-He-Stay-Or-Will-He-Go Ford, the handsomely-paid Gucci creative director who has the industry holding its collective breath waiting for a decision on whether he’ll remain at the firm once his contract expires next year. Meanwhile, the salaries of Luigi Francavilla, vice president of Luxottica and Francesco Chemello demonstrate the hazards of playing Russian roulette with bonuses. In 2001, they each received a 14 million euro bonus, which put them at the top of the list. Last year, Francavilla’s salary was a modest 796,352 euros. Chemello didn’t even make the list. (See related story, Europeans Behind U.S. in Exec Compensation.)

1

ROSE MARIE BRAVO, ceo, Burberry

2002 compensation: $9.2 million (1); 2001 compensation: $6.8 million; difference: 36 percent

2002 sales: $973.5 million; 2001 sales: sales: $818.7 million; 2002 earnings: earnings: $85.6 million

Compensation as a percentage of 2002 earnings: 10.7

Bravo’s compensation included a bonus that amounted to 86 percent of her base salary. The ceo earned a $1.3 million bonus based on the attainment of internally set company targets for operating profit. In addition to her base salary in fiscal 2003, Bravo took home another $6 million, the fruit of a long-term incentive plan set in 1998. The Burberry ceo also received benefits worth $446,000, which included a car and driver, a flat in Kensington and a country-club membership. Total sales for the year rose 18.9 percent.

2

TOM FORD, creative director and vice chairman of the management board, Gucci Group

2002 compensation: $4.8 million, including $3.4 million in salary, plus a guaranteed bonus of $1.3 million (2); 2001 compensation: N/A; difference: N/A

2002 sales: $2.71 billion; 2001 sales: $2.75 billion; 2002 earnings: $242.4 million (2)

Compensation as a percentage of 2002 earnings: 2

Ford joined Gucci’s executive ranks last year when he was appointed vice chairman of the company’s management board. Meantime, he’s busy cashing in stock options. He made about $38 million over two months by buying and selling Gucci shares. Gucci’s just-released first quarter results included a whopping 97 percent plunge in net profit to 1.2 million euros. Still, no word on whether he and ceo Domenico De Sole will stay at Gucci when their contracts expire next year.

3

GIANLUIGI FACCHINI, chairman and co-ceo, Fin.part

2002 compensation: $2.82 million (including a $224,144 bonus); 2001 compensation: $2 million; difference: 41 percent

2002 sales: $513.7 million; 2001 sales: $474.4 million; 2002 net loss: -$71.9 million

Compensation as a percentage of 2002 revenues: N/A

Facchini made headlines earlier this year when he stepped down as chairman of the company he founded amid growing market doubts over the group’s financial health and massive debt, which, at the end of the first quarter, stood at $467.2 million, compared with the company’s full-year 2002 volume of $526.6 million. Faccini retained his co-ceo title at Fin.part, which owns brands such as Cerruti, Frette and Henry Cottons.

4

LUC VANDEVELDE, chairman, Marks & Spencer

2002 compensation: $2.8 million (1)

2001 compensation: $864,000 a year; difference: 224.1 percent

2002 sales: $13.3 billion; 2001 sales: $12.5 billion; 2002 earnings: $790 million

Compensation as a percentage of 2002 earnings: 0.4

Vandevelde’s compensation included $1.8 million in a bonus and benefits. This year, however, he will be subject to a new remuneration package in the form of stock to be paid on the basis of 13,500 shares per calendar month. He will no longer be eligible for a bonus or pension contributions. At the current stock price, Vandevelde would earn the equivalent of nearly $72,000 a month, or $864,000 a year.

5

DOMENICO DE SOLE, ceo and chairman of the management board, Gucci Group

2002 compensation: $2.4 million, including $2 million salary and $449,556 worth of charitable contributions (2)

2001 compensation: $4.5 million, including $2 million in salary, plus a discretionary bonus of $2.4 million based on fiscal 2000 results; difference: -46.7 percent

2002 sales: $2.71 billion; 2001 sales: sales: $2.75 billion; 2002 earnings: $242.4 million

Compensation as a percentage of 2002 earnings: 1

Gucci’s dramatic drop in net profits on a 6.7 percent decline in sales in the first quarter was due to dismal business conditions, resulting from a series of market conditions De Sole dubbed “the perfect storm.”

6

VITTORIO RADICE, executive director, Marks & Spencer home business

2002 compensation: $2 million; 2001 compensation: N/A; difference: N/A (1)

2002 sales: $13.3 billion; 2001 sales: $12.5 billion; 2002 earnings: $790 million

Compensation as a percentage of 2002 earnings: 0.3

Radice joined M&S this year as executive director of the home business. His pay included a guaranteed bonus of $484,967 and $1.5 million as compensation

for loss of benefits at his previous job. Radice plans to organize the store around rituals rather than departments, and said merchandise will cover such activities as entertaining, resting and traveling. “The way we curate and edit our homes has changed so much in the last 30 years,” he said.

7

JEAN-LOUIS DUMAS, executive chairman, Hermès International

2002 compensation: $2.14 million; 2001 compensation: $1.98 million; difference: 8.1 percent

2002 sales: $1.39 billion; 2001 $1.31 billion; 2002 earnings: $242.4 million

Compensation as a percentage of 2002 earnings: 0.88

Dumas, a direct descendant of Thierry Hermès, founder of the firm that got its start making saddles for tony aristocracy, again rang in as France’s top paid executive. But that doesn’t mean Dumas flaunts his wealth. He is one of the most discreet and modest of France’s fashion fraternity. For 2002, Hermès reported a 1.3 percent rise in sales to $1.32 billion from $1.31 billion as a result of the weak dollar and yen. Excluding currency fluctuations, sales for the year moved ahead 5.9 percent.

8

SERGE WEINBERG, ceo, Pinault-Printemps-Redoute

2002 compensation: $1.95 million; 2001 compensation: $1.96 million; difference: -0.5 percent

2002 sales: $29.56 billion; 2001 $30.02 billion; 2002 earnings: $1.77 billion

Compensation as a percentage of 2002 earnings: 0.1

As chairman and ceo of the French retail and luxury conglomerate Pinault-Printemps-Redoute, Weinberg has been a busy man over the last year as he redirects the firm away from its business-to-business activities in favor of its higher-margin activities. Controlled by French tycoon François Pinault, PPR faces a pledge in 2004 to buy all the Gucci Group stock it doesn’t own at $85.50 per share. PPR reported a 1.5 percent decline in 2002 sales to $28.74 billion.

9

GERHARD WEBER, ceo, Gerry Weber AG

2002 compensation: $1.88 million, including an $880,000 bonus; 2001 compensation: $1.3 million; difference: 44.6 percent

2002 sales: $434.29 million; 2001 sales $443.3 million; 2002 earnings: $26.4 million

Compensation as a percentage of 2002 earnings: 7.1

As the two members of the managing board of Gerry Weber AG, ceo Gerhard Weber and director Udo Hardiek each receive a base salary of 890,190 euros and “a share in profits” of 1.6 million euros. The firm doesn’t say if they split the 1.6 million euros evenly.

10

ROGER HOLMES, ceo, Marks & Spencer

2002 compensation: $1.8 million in salary and bonuses (1)

2001 compensation: N/A difference: N/A

2002 sales: $13.3 billion; 2001 sales: $12.5 billion; 2002 earnings: $790 million

Compensation as a percentage of 2002 earnings: 0.2

Vandevelde and Holmes together engineered a rapid turnaround of M&S’ businesses, but despite improved margins and higher market share, exceptional items drove down net income 2.3 percent to $790 million in the year ended March 31. Sales rose 6 percent to $13.3 billion as apparel revenues rose 10 percent to $6.7 billion.

11

LUCIANO BENETTON, chairman, Benetton

2002 compensation: $1.79 million; 2001 compensation: $1.68 million; difference: 6.5 percent

2002 sales: $2.23 billion; 2001 sales: $2.35 billion; 2002 net loss: -$11.2 million

Compensation as a percentage of 2002 earnings: N/A

Earlier this year, the Benetton family said it was relinquishing its daily management role to a new set of executives, including newly tapped ceo and former Fiat honcho Silvano Cassano. Luciano Benetton will stay on as chairman, but in an almost “honorary” capacity, the company said.

12

CARLO BENETTON, deputy chairman, Benetton

2002 compensation: $1.79 million; 2001 compensation: $1.68 million; difference: 6.5 percent

2002 sales: $2.23 billion; 2001 sales: $2.35 billion; 2002 net loss: -$11.2 million

Compensation as a percentage of 2002 earnings: N/A

The company has been selling off its struggling sports assets, which include the Nordica and Rollerblade brands. Benetton has also agreed to sell its Prince and Ektelon brands to Lincolnshire Equity Fund II LP for $39.4 million.

13

GIULIANA BENETTON, board member, Benetton

2002 compensation: $1.79 million; 2001 compensation: $1.68 million; difference: 6.5 percent

2002 sales: $2.23 billion; 2001 sales: $2.35 billion; 2002 net loss: -$11.2 million

Compensation as a percentage of 2002 earnings: N/A

Italian fashion group Benetton is set to axe several U.K. stores amid sluggish sales in a tough retail environment and fierce competition from rivals such as Zara and H&M, which are finally breaking into the Italian market.

14

FRANCESCO TRAPANI, ceo, Bulgari

2002 compensation: $1.74 million; 2001 compensation: $3.47 million; difference: -49.9 percent

2002 sales: $886.7 million; 2001 sales: $869.5 million; 2002 earnings: $85.2 million

Compensation as a percentage of 2002 earnings: 2

Bulgari had a challenging 2002, but Trapani has said market conditions should improve later this year. In the meantime, he is focusing on cutting costs to boost earnings. Net profit in 2002 grew 12 percent to $85.2 million. Bulgari recently cut about 20 jobs in its U.S. operations, mainly administrative and back-office functions. Trapani said similar cuts could occur elsewhere in the world.

15

UDO HARDIEK, director, Gerry Weber AG,

2002 compensation: $1.72 million, including a $720,000 bonus; 2001 compensation: $1.3 million; difference: 32.3 percent

2002 sales: $434.3 million; 2001 sales $443.3 million; 2002 earnings: $26.5 million

Compensation as a percentage of 2002 earnings: 6.5

There are 400 Gerry Weber shops worldwide. In addition to Germany, where Gerry Weber is based, the company operates stores in Switzerland, Saudi Arabia, combined United Arab Emirates, the Netherlands, Great Britain, Austria, France and Russia.

16

ANTONIO BELLONI, chief operating officer, LVMH Moët Hennessy Louis Vuitton

2002 compensation: $1.6 million; 2001 compensation: $651,277; difference: 145.7 percent

2002 sales: $14.22 billion; 2001: $11.2 billion; 2002 earnings: $623 million

Compensation as a percentage of 2002 earnings: 0.3

A newcomer to the list, Belloni started midway through 2001, replacing Myron Ullman. Belloni previously headed Procter & Gamble’s European operations. The group is on track to deliver a “tangible” increase in operating earnings this year thanks to juggernaut brands like Louis Vuitton, Christian Dior, Dom Perignon, Hennessy and Moët & Chandon.

17

BERNARD ARNAULT, chairman, LVMH Moët Hennessy Louis Vuitton

2002 compensation: $1.59 million; 2001 compensation: $1.56 million; difference: 1.9 percent

2002 sales: $14.22 billion; 2001: $11.2 billion; 2002 earnings: $623 million

Compensation as a percentage of 2002 earnings: 0.3

His salary may be be less than the LVMH chief operating officer, Antonio Belloni but as owner and chairman of the luxury conglomerate, Arnault still ranks as the richest man in France with a net worth of about $7 billion.

18

ANTONIO FAVRIN, ceo and vice chairman, Marzotto

2002 compensation: $1.1 million, including a $578,829 bonus (1) ; 2001 compensation: $732,250; difference: 50.2 percent

2002 sales: $3.5 billion; 2001 sales: $3.42 billion; 2002 earnings: $417 million

Compensation as a percentage of 2002 earnings: 0.3

Marzotto, owner of the Valentino and Hugo Boss fashion houses, said its sales for the quarter ended March 31 rose 3.4 percent to $593.9 million, aided by the consolidation of Valentino, which it bought in spring 2002. Marzotto reiterated that Valentino is still on track to break even in 2004. In 2002, Valentino widened its operating loss to $13.8 million from a loss of $3 million the year before. Sales rose to $149.4 million from $144.7 million.

19

BRUNO SALZER, ceo, Hugo Boss

2002 compensation: $1 million, including a $578,829 bonus (1); 2001 compensation: $732,250; difference: 50.2 percent

2002 sales: $1.17 billion; 2001 sales: $1.8 billion; 2002 earnings: $80.2 million

Compensation as a percentage of 2002 earnings: 1.2

The Hugo Boss management board, which consists of ceo Sälzer; Lothar Reiff, head of creation and licensing; Jorg-Ziggo Müller, financial chief and Werner Lackas, chief of production, equalled $3.66 million, and of this sum $2.35 million was fixed and $1.31 million was variable. Within the scope of the stock appreciation rights, program the members of the management board received 112,500 rights. The company did not say how the rights were divided between the four remaining members of the board. Net profits for 2002 fell 30.6 percent to $80.2 million, compared with $115.7 million in 2001.

20

TONINO PERNA, chairman and ceo, IT Holdings

2002 compensation: $954,112; 2001 compensation: $720,697; difference: 24.5 percent

2002 sales: $734.43 million; 2001 sales: $590.26 million; 2002 earnings: $5.72 million

Compensation as a percentage of 2002 earnings: 16.5

Perna is building his own empire both through in-house brands such as the recently acquired Gianfranco Ferré and a growing portfolio of licenses for young secondary lines like D&G, Just Cavalli, Versus and Versus Jeans. Last month, at the men’s shows, the group presented its new diffusion line, GF Ferre, to mixed reviews.