Stefan Larsson’s return to the c-suite as president of PVH Corp. also means a return to executive-level pay.
When Larsson, 44, takes on the new role June 3, he will start with an annual salary of $1.2 million and a bonus that will be at least 150 percent of that salary, pro rated since he’s joining the company after the start of its fiscal year in early February, according to a regulatory filing Wednesday. All of the company’s brands, including Tommy Hilfiger and Calvin Klein, will report to Larsson.
The newly minted president will also receive performance stock units under the company’s incentive plan, as well as non-qualified options and restricted stock units — which all together could boost his overall compensation by $3.75 million or more. The value of the stock awards might fluctuate significantly given vesting schedules and changes in the company’s share price.
Larsson is set to spend three to four years learning the company and then is expected to step up and become chief executive officer, succeeding Emanuel Chirico, who is ceo and chairman and is expected to become executive chairman.
The employment contract also specifies if any other person is named ceo, Larsson has the right to resign for “good reason” and receive a severance package that includes a payment equal to two times the sum of his base salary plus his bonus at “target” level performance.
Larsson comes to PVH having served as ceo of Ralph Lauren Corp. for about a year and a half ending in May 2017 and also as global president of Old Navy for three years ending in 2015.
His salary in those jobs was in the same ballpark as his salary at PVH, tallying $1.25 million at Ralph Lauren in 2017, and $1 million at Old Navy in both 2013 and 2014. As is the case for executives at most big fashion companies, his compensation was really driven by stock awards, the actual value of which can be slippery, and incentive pay. Larsson’s compensation at Ralph Lauren in 2016 and 2017 totaled $27.3 million. And his compensation during his three years at Old Navy worked out to $13.6 million.
Wall Street seems to think Larsson is worth the investment.
Shares of PVH were up 1.1 percent to $109.7 in midday trading Wednesday.
Wells Fargo analyst Ike Boruchow noted that the company’s stock has “been choppy” for a year, falling about 3 percent while the S&P 500 rose 5 percent.
“The underperformance can be attributable to multiple missteps at Calvin Klein, a change of direction at the Calvin Klein brand — including the elimination of Raf Simons design team and a total restructuring of the Calvin Klein 205W39NYC brand — and ongoing gross margin pressure from carryover inventory into early 2019,” Boruchow said.
“More generally, the investor confidence has been hindered by lower visibility into future growth,” the analyst said. “That said, longer-term visibility in the direction of the business just became much clearer, as PVH announced the addition of Stefan Larsson — very highly regarded retail executive….We are encouraged by this announcement and think this will be a positive catalyst for the stock story going forward.”
While Larsson is set to dig in and start to really learn the PVH business, he is expected to spend some time right away helping to get the Calvin Klein business back on track.