John Idol isn’t going anywhere after all.
Schulman, a fashion veteran who previously led the Coach brand, was tapped to be CEO of Capri’s Michael Kors brand in August when a clear line of C-suite succession was set up.
On Wall Street, where Schulman was greeted as the heir apparent last year, investors took a step back and sent shares of Capri down 12.1 percent to $47.92 in early-morning trading.
In a statement, Idol said: “At Capri Holdings, we are executing against our clear strategic vision for growing our three powerful fashion luxury brands and seeing strong results. We remain well-positioned to achieve meaningful long-term revenue and earnings growth as well as deliver increased value for our shareholders. I am fully committed to continuing to lead Capri Holdings and driving our future success.
“Michael Kors has a talented management team in place that will continue to execute on its strategic initiatives,” Idol said. “The strategies that we put in place prior to the pandemic have been generating strong consumer demand and driving higher profitability as we continue to elevate brand positioning. The board and I remain extremely optimistic about the future growth of Michael Kors and Capri Holdings. We are grateful to Josh for his contributions to our organization.”
While it is not clear exactly what caused the company to switch its plans — Schulman is being paid very well as he leaves and successfully negotiated a shorter period on the sidelines for himself.
Schulman’s non-compete will be a relatively short six months, putting a well-respected and well-rounded executive back on the market in September.
Under his separation agreement, Schulman will receive:
• His annual base salary of $1.3 million for two years starting today, totaling $2.6 million.
• Two years’ worth of his target annual incentive pay, totaling another $5.2 million.
• A bonus of at least $700,000 for his work so far.
• And his restricted share units in company stock with a vesting date within 12 months will continue to vest.
“The separation agreement contains mutual non-disparagement provisions and requires that Mr. Schulman comply with confidentiality and non-solicitation restrictive covenants,” the company said in a filing with the Securities and Exchange Commission.
The company also amended and restated its employment agreement with Idol, who has been CEO of the company since 2003 and orchestrated its expansion from a business focused solely on Michael Kors to a budding fashion group that also owns Versace, Jimmy Choo and is looking to continue to add brands.
Idol’s employment agreement is open ended and will terminate with six months advanced notice or with “good reason.”
Like many other fashion companies, Capri has been bouncing back strong from the worst of the pandemic.
Idol said recently that the company added 11 million customers to its data bases over the past year.
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