Art Peck might be leaving Gap Inc. amid complaints about performance, but his pay package skyrocketed during the close to five years he led the specialty retailer as president and chief executive officer.
Back in 2015 — his first year in that position — his total compensation started at $6.1 million and rose steadily, with his annual take rising to $8.9 million and then $15.5 million. By 2018, his pay package stood at just under an eye-watering $21 million, the same year that the company’s share price sank 21 percent.
That compensation number made him the fourth-highest paid fashion and beauty executive last year. In first place was Fabrizio Freda, The Estée Lauder Cos. Inc.’s president and chief executive officer, whose total compensation package added up to $48.8 million. Behind him were Walmart Inc.’s president and ceo Doug McMillon and Ralph Lauren Corp. founder Ralph Lauren, at $23.6 million and $22.2 million, respectively.
But while the pay packages are certainly eye-popping, the numbers can also be deceptive as they’re made up of a mixture of cash and stocks.
In particular, the full value of the stock and options may never be realized due to fluctuations in stock prices and vesting schedules.
In Peck’s case, his 2018 compensation was made up of a $1.5 million salary, around $19 million in stock and option awards and $220,440 in all other compensation. The overall figure did not include a bonus, which Peck volunteered to forgo “in light of business financial performance.”
In a filing to the Securities and Exchange Commission, Gap stated that Peck, on average, took home about $4.75 million each year in cash and equity, once stock-price changes and other factors were taken into account.
And although Peck might never see the full value of those stock and option awards — particularly since the stock was down nearly 30 percent for the year just before he departed, the former could get something on the way out, although the details of any exit package he received are yet to be disclosed.
When former Tapestry Inc. chief executive officer Victor Luis abruptly “departed” the company in September, he signed a 27-month non-compete agreement and was set up with a separation package that included six months pay in lieu of notice, or $700,000; 21 months of his base salary, totaling $2.5 million; bonuses, and the continued vesting of stock options.
At Gap, Robert J. Fisher, non-executive chairman of the board and son of the late founder of Gap, Don Fisher, is taking over the president and ceo job on an interim basis.
The executive change comes at a pivotal time for the company. Gap announced in February that it is splitting itself into two publicly traded companies. One will be made up of Old Navy, while the other — a yet-to-be-named company — will consist of Gap, Athleta, Banana Republic, Intermix and Hill City.
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