NEW YORK — He’d be real tough to get, but sources say May Department Stores Co. has its eye on Roger Farah to be its next chief executive officer.
Farah, president and chief operating officer of Polo Ralph Lauren, is the kind of marquee name that St. Louis-based May could use to lift its stock, restore confidence in the company and motivate its team, following the departure of Gene Kahn as ceo last month.
Farah is also among the few retailers fully qualified to run May Co., considering his successful track record at Polo, Federated Department Stores and Saks Fifth Avenue. He also ran Venator, where he shut down Woolworth’s, probably the most difficult and emotional assignment he ever had. May Co. would be another rough assignment.
“The problems at May are so deep and the chances of a breakup or an acquisition are pretty good,” said a retail source.
As reported, Federated Department Stores and May Co. have been negotiating a merger, but price, considering May’s stock has gone up on the merger speculation, has been a barrier to a deal.
Farah is considered one of the industry’s top executives, given his strong blend of merchandising and administrative skills and thoughtful approach to business. “He can be tough, but people like to work for him,” said another source who knows him.
The source said Farah is on May’s list of candidates, but added, “He’s not leaving Polo and his family is tied to New York. He’s turned down lots of opportunities that are more compelling than May. Roger got the call from Gap, before they hired Paul Pressler,” as ceo. “He’s doing so well with Ralph, and he has a home in South Carolina. He’s not going anywhere and why should he?”
Farah’s employment agreement at Polo would make it difficult — and perhaps expensive — for May to lure him away. His contract was extended in July 2004 by the Polo board from Dec. 31, 2007 through April 3, 2010, the last day of Polo’s fiscal year 2010. The amendment continues his current base salary, annual incentive bonus opportunity and deferred compensation through the end of the extended term.
Farah’s annual base salary, according to the latest annual report on file with the Securities and Exchange Commission, is $900,000, and he is eligible to receive an incentive base bonus ranging from 100 to 300 percent. The target bonus is 200 percent of annual salary. In addition, the amendment continues his right to receive $250,000 per year in the form of deferred compensation through 2010. Farah also receives grants of restricted stock units payable in shares of the company’s Class A common stock.
Farah could not be reached for comment Monday.
— With contributions from Vicki Young