GUESS EXEC SALARIES, BONUSES CLIMB
Byline: Thomas J. Ryan
NEW YORK — A $1 million signing bonus was part of the lure when Ken Duane left Nautica to join Guess Inc. last June as president of worldwide sales.
The bonus is reported in Guess’s just-released proxy statement.
Duane was executive vice president of Nautica International; when he joined Guess it was seen as a key step in the firm’s strengthening of management as it prepared to go public. Guess made its initial public offering in August. Duane had been with the publicly owned Nautica for six years and before that he was with Hugo Boss.
In addition to the sign-on bonus, Duane received $296,154 in salary plus an additional bonus of $187,500. Under his agreement with Guess dated May 14, 1996, Duane receives a base salary of $500,000, $600,000 and $650,000 in the first, second and third years of his contract.
He also received 106,705 shares in stock options exercisable at $18 each, the price of Guess’s IPO. The shares vest over the next three years.
Guess’s stock closed Wednesday on the New York Stock Exchange at 11, up 3/8.
Among other executive salaries, the proxy shows that Maurice Marciano, Guess’s chairman and chief executive officer, was paid $3.4 million last year. That’s slightly down from $3.6 million earned in 1995, primarily reflecting changes in his contract as a result of Guess’s IPO.
The chairman’s bonus grew to $1.7 million from $1.2 million, but his base salary was reduced to $1.6 million last year from $2 million in 1995.
He also received “other compensation” of $152,634 in 1996, down from $378,230 in 1995. The latest year included $150,175 to cover transportation costs while the prior year included $150,175 in life insurance payments in addition to $192,256 in transportation costs.
Paul Marciano, president and chief operating officer, made $2.9 million against $2.7 million in 1995, and Armand Marciano, senior executive vice president, got $2.2 million versus $1.85 million. The figures include salary, bonus and other compensation.
The three brothers, who had been sole owners prior to the IPO, control 83 percent of the firm. Maurice owns 38.6 percent; Paul, 30.6 percent, and Armand, 13.7 percent.
Roger Williams, executive vice president and chief financial officer, earned $680,400 against $450,000 in 1995. Williams also received 200,000 stock options.
Sales at its full-price retail and outlet stores climbed 23.8 percent to $209.8 million from $169.4 million.
The gains primarily reflect a 9.3 percent hike in same-store sales resulting from a better reception for its merchandise mix and improved inventory controls, as well the addition of seven new stores.
Guess’s retail business at yearend included 69 full-price stores and 46 outlets, and plans call for another 13 full-price and three outlet units in 1997.
Wholesale volume rose 6.3 percent to $288 million. In the U.S., wholesale revenues declined $14.3 million as a result of greater competition in branded basic denim, the 10-K said.
This was offset, however, by a $31.5 million increase in wholesale volume outside the U.S., aided by expansion into department stores and additional freestanding stores.
International revenues grew to 12.1 percent of overall sales in 1996 from 6.9 percent in 1995.
At yearend, 235 Guess stores operated internationally, of which 149 were licensed and 85 operated by distributors. The flagship store in Florence, Italy, is the only international unit operated by the company. Guess plans 31 new distributor-operated stores and 20 licensee-operated stores in 1997.
Royalties last year gained 14.9 percent to $53.3 million, and Guess said wholesale volume of licensed products grew to $741.4 million in 1996 from $451.7 million in 1993. Approximately 45 percent of its royalties stemmed from Guess Watches, Baby Guess, Guess Kids and Guess Eyewear.
Other information included in Guess’s 10K:
Federated Department Stores was Guess’s biggest customer, accounting for 8.6 percent of sales, followed by May Department Store Co., 6.7 percent, and Dillard Department Stores, 5.9 percent.
At yearend, there were 1,276 in-store shops in department stores, excluding those installed by licensees. They include 644 in-store women’s shops and 632 men’s. Plans for 1997 call for 65 new women’s shops, 75 men’s shops and 100 remodelings. In addition, Guess Collection in-store shops are being introduced in selected better department stores in spring 1997.
During 1996, Guess’s advertising expenditures, together with amounts spent by its licensees and distributors, exceeded $50 million.
As of March 16, Guess’s backlog, primarily for orders of fashion apparel, stood at $83 million, versus $64 million a year ago.
Guess had 3,000 employees, including 1,200 in wholesale operations and 1,800 at retail.