STRONG YEAR BRINGS $4.4 MILLION BONUS TO RALPH LAUREN
Byline: Catherine Curan
NEW YORK — Reaping the rewards of robust earnings at Polo Ralph Lauren since its initial public offering last year, chairman Ralph Lauren got a $4.4 million bonus in fiscal 1998, bringing his paycheck for the year to $5.4 million.
According to Polo’s proxy statement for its annual meeting to be held Aug. 13, Lauren, who also is chief executive officer, earned a base salary of $1 million for the year ended March 28. That’s lower than his year-ago base pay of $2.7 million, but it was sweetened by the bonus; there was no bonus in the prior year.
According to the proxy, at the time of the initial public offering last June, Lauren entered into an employment agreement for annual base pay of $1 million, with an annual bonus within a range of $2 million to $5 million, $3.5 million payable for reaching performance targets. Lauren’s fiscal 1998 bonus was based on Polo Ralph Lauren’s pretax income of $199.6 million.
Lauren’s total compensation for the latest fiscal year included $3.3 million, mainly in company-paid life insurance for Lauren and his wife, and options for 500,000 shares of stock. The exercise price is $26 a share, the same as the IPO share price, and the options expire in June 2007. Based on Friday’s closing price of 28 7/8, up 5/8 on the New York Stock Exchange, Lauren’s options are worth $14.4 million.
Lauren will receive options for another 250,000 shares in each of the next three fiscal years.
Other top executives at Polo also took home plump paychecks. Michael J. Newman, vice chairman and chief operating officer, earned $879,616, plus a bonus of $1.8 million, $1.3 million in restricted stock awards and options for 350,000 shares.
Newman’s employment contract of June 9 stipulates a base salary of not less than $900,000, and an annual incentive bonus based on a percentage of pretax earnings in excess of $75 million; the bonus is not to exceed $3 million.
In the prior year, Newman was paid $800,000 and received a $5.2 million bonus, including a $2 million restricted stock award granted at the time of the IPO.
Cheryl Sterling Udell, group president of women’s wear, earned $700,000 in the latest fiscal year plus a bonus of $661,150 and options for 100,000 shares.