MILAN — The stunning news of his departure as president and chief executive of Gucci Group meant that he would go out with a bang, but it now appears that Domenico De Sole will leave the luxury house with a plumper nest egg as well.
This story first appeared in the November 25, 2003 issue of WWD. Subscribe Today.
De Sole pocketed a gain of $970,080 from trading in Gucci shares Nov. 17, according to information posted on the Dutch stock market regulator’s Web site. The executive, who along with Gucci creative director Tom Ford will step down next spring, bought 24,000 shares in Gucci priced at $43.85, a discount to current market prices, and sold them later that same day for $84.27 each.
Both De Sole and Ford have built considerable fortunes through their stock options and large salaries at the company, fueling speculation that the two have pockets deep enough to start their own label or acquire a brand in their post-Gucci careers. In April and May of this year, Ford made $38 million by exercising his options and in 2002 he made about $23 million in similar transactions.
Ford, who also sits on Gucci’s three-member management board, earned a salary of $4.7 million, or 3.95 million euros converted at current exchange, in 2002, plus a guaranteed bonus of $1.85 million, or 1.56 million euros. De Sole earned $2.75 million, or 2.31 million euros, last year. That sum includes $618,770, or 520,500 euros, in charitable contributions that the company paid to match De Sole’s personal donations. Those stipends make the pair two of the best-paid luxury goods executives in Europe.
The Dutch stock market regulator reported that De Sole still had outstanding options for 1.6 million shares. Gucci’s 20F filing with the U.S. Securities and Exchange Commission specified that as of July 1, De Sole held options that were exercisable in respect of 1.37 million shares with strike prices of between $32.69 and $103. As of that date, Ford held options for 1.2 million shares with exercise prices of $103 and $128.
Since July, Gucci has issued an extraordinary dividend that reduces the strike price for each of those options by $15.78. But even then, many of their options at such high strike prices are likely to remain worthless.
Most in the market agree that Gucci’s share price won’t surpass the $85.52 that Pinault-Printemps-Redoute SA must offer for each Gucci share next March.
Gucci’s shares are currently trading at about $84.90.