Both Michael Kors and John Idol saw their 2014-15 compensation expand more than 11 percent to $15.1 million, as Michael Kors Holdings Ltd.‘s sales and earnings grew by more than a third.
Kors, who is honorary chairman and chief creative officer, and Idol, chairman and chief executive officer, each received salaries of $2.5 million and cash bonuses of $5 million. The bonuses were based on a provision that grants them each 2.5 percent of the company’s earnings before interest, taxes, depreciation and amortization, up to a maximum of the $5 million received.
But the bulk of the pay increases for both executives came from a 25.1 percent increase in stock and option awards, which rose to a total of $7.5 million. Awards are reported to the Securities and Exchange Commission at fair value on the grant date and the amounts ultimately received by the executives might vary because of vesting schedules, share prices and other considerations. Kors filed its definitive proxy detailing executive compensation late Tuesday.
Other compensation for Kors rose 19.4 percent to $131,000 while Idol’s was up 26 percent to $83,000.
Despite concerns about a deceleration in its North American comparable-store sales in the fourth quarter, Michael Kors’ top and bottom lines performed well in the fiscal year ended March 28. The company’s net income rose 33.2 percent, to $881 million from $661.5 million, on a 37.9 percent revenue increase to $4.37 billion from $3.17 billion in the prior year.
“While we reached several milestones in fiscal 2015, we did face a number of challenges in the back half of the year, including weaker global tourist traffic, a slowdown in our watch category in North American, delays related to the West Coast port issues and continued weak mall traffic rends in North America,” Idol wrote in a letter to shareholders included in the proxy. “In addition, our international businesses were impacted by the strengthening U.S. dollar.”
The company’s annual meeting will be held in London at 1 p.m. local time on July 30.