Fashion
The $10M+ Club: CEO Pay Climbs Higher in Fashion
The corner office comes with its burdens — from consumer and supply chain worries to a delicate dance with employees and competitors — but the perks are good.
While many chief executives have personal rides on company aircraft, car services and more built into their compensation, the most controversial and visible benefit is the multimillion-dollar pay package.
A WWD study of executives at the top of the org chart in U.S. fashion, retail and beauty found 29 corporate CEOs and executive chairmen who received pay packages of more than $10 million in the most-recently reported fiscal year.
The numbers can be deceiving as the pay packages are often made up of stock or options awards that only pay out if the executives stay in place and shares of the company keep moving higher.
So, while the highest-paid executive on the list, Coty Inc.’s CEO Sue Nabi, received a compensation package that was valued at $149.4 million, more than 97 percent of that came in the form of stock awards that vest through 2030. The big payout relies heavily on company performance. On a cash basis, Nabi took home a salary of $3.5 million.
The number-two spot on the list went to G-III Apparel Group’s chairman and CEO Morris Goldfarb, who received a $31.4 million pay package that included $20.1 million in stock and option awards and $10.5 million in salary and incentive pay. Goldfarb’s pay package, although big, represents a significant evolution. His compensation used to include the “contractual right to 6 percent of pre-tax income,” but the company said shareholders viewed the approach as “awarding too much cash compensation and were troubled that the awards were not capped.” In light of the change to his pay formula, Goldfarb received “a one-time performance-based inducement grant.”
That refinement shows how executive compensation can, over time, evolve.
The Competition
The process of setting pay for top executives is motivated by retaining corporate talent and aligning their interests with those of shareholders.
The often eye-popping numbers draw plenty of scrutiny from critics who say CEOs are paid too much relative to the workers who power companies, but they also confer bragging rights to CEOs who are used to having their careers and paychecks play out in the open.
The people who rise to the top of multibillion-dollar corporations are already very motivated, and one way or another, have been very successful and been making good money for a long time.
“They are also super competitive,” said Jannice Koors, senior managing director and head of consulting services at executive compensation consultancy Pearl Meyer. “That’s how they got to where they are — it’s almost like executive compensation is a bit of a competitive sport.”
And the competition keeps getting tougher as CEO packages move higher.
“Part of the challenge that organizations find themselves in, that boards of directors find themselves in is, as the market increases, you kind of get caught up in that,” Koors said.
“It’s no different than an accountant who walks into their boss’s office and says, ‘The accountant who sits next to me and the cube next to me gets paid more than I do. How come?’ The CEO’s numbers have more zeros behind them, but it’s the exact same argument.”
It is a powerful argument that’s helped along by the fact that, while investors have to approve allocations of stock for executive compensation, that kind of pay doesn’t hurt the company’s cash flow.
“When I pay you a salary, when I pay you a cash bonus, that is real cash coming out of the company’s bank account,” Koors said. “When I give an executive a share of stock, it’s like payment in kind.”
The Different Flavors of Stock Awards
That payment comes in several different flavors, she said. They include restricted stock that is given to the executive as it vests, stock options that offer them an opportunity to buy shares at a certain price in the future, and performance shares that are tied to company metrics.
In the official reckoning of CEO pay seen in company regulatory filings, the value of share-based compensation is based on where the company was trading at when the stock was granted.
How much those shares end up being worth to CEOs is never reported and relies also on how the market overall performs, making the biggest portion of CEO pay also the hardest to read.
The S&P 500 Benchmark
Amit Batish, senior director of content and communications at Equilar, which tracks CEO pay at the companies in the S&P 500, said, “Our latest CEO pay study showed that median compensation jumped 12.6 percent to $16.3 million in 2023. Stock awards made up approximately 70 percent of total compensation in 2023.”
By at least one measure, that put executive pay in line with how the company fared under a CEO’s leadership.
“Among the executives in our recent study on S&P 500 CEO pay, the median total shareholder return at those companies was 13 percent, an indicator of strong financial performance,” Batish said. “In that sense, CEO pay plans are effective, but that’s ultimately up to the shareholders to decide. Overall, competitive compensation will motivate CEOs to perform at a high level; however, that’s not always the case.”
The Status Quo
While CEO pay remains high and controversial, there seems little chance that the dynamic changes dramatically anytime soon.
Shareholders weigh in each year with advisory votes and routinely sign off on even outsized pay packages by wide margins.
In its most recent proxy statement last year, Coty detailed its executive pay packages and noted that shareholders have signed off on the company’s approach.
“We provided stockholders a ‘Say-on-Pay’ advisory vote on the compensation of our [named executive officers] in 2021,” Coty said. “At our 2022 annual meeting of stockholders, approximately 77.8 percent of the votes cast for approval of the ‘Say-on-Pay’ advisory vote. Our Say-on-Pay votes have averaged 87.8 percent support for the last nine years. We believe these results indicate that our shareholders are generally supportive of our compensation program.”
The Art and Science of CEO Pay
At the same time, there have been continuing refinements to the art and science that is CEO pay as boards try to bring in and keep the best talent and navigate a tough consumer environment under steady scrutiny.
“One of the things investors want is at this level just pay to be highly variable,” said Matthew Vnuk, a partner at Compensation Advisory Partners. “You are seeing it be highly variable. What is the right starting point is a fair question.
“Boards believe that having the right person in the seat matters a lot to the outcome you achieve for your stakeholders,” Vnuk said. “So, ‘We have to be market competitive to have this person in place, but to achieve top of market pay or top quartile pay, we’ve got to be a top quartile performer.’”
The trick of linking up the two is in setting the right targets.
“If the goals are not being set correctly, too easy or too hard, this doesn’t work,” Vnuk said. “So companies that get this right spend multiple meetings talking about goals, have enough time on the agenda to have a discussion versus just making an administrative item.”
With the market changing, not just year-to-year, but day-by-day, the race for companies with consumers — and pay trends across the industry — is clearly on.
Ranking Power Pay
Executives leading top companies receive most of their compensation in the form of stock and option awards. And even though the realized value of that stock-based pay relies on company performance and other factors, executives are cushioned by often hefty salaries and incentive pay packages. Overall, most CEOs and executive chairmen saw their pay in the most-recent tally rise over the prior year. — EVAN CLARK & KATHRYN HOPKINS
1. Sue Nabi
Coty Inc., CEO
Total compensation: $149,429,486 +4,100%
Base salary: $3,549,000
Stock and option awards: $145,875,000
Bonus and incentive pay: $0
Net sales: $5.6 billion +5%
Fiscal year ended: 6/30/2023
2. Morris Goldfarb
G-III Apparel Group, chairman, CEO
Total compensation: $31,431,039 +442.8%
Base salary: $1,148,077
Stock and option awards: $20,709,998
Bonus and incentive pay: $9,384,000
Net revenues: $3 billion -4%
Fiscal year ended: 1/31/2024
3. John Donahoe
Nike, CEO
Total compensation: $29,184,701 -11%
Base salary: $1,557,692
Stock and option awards: $19,237,708
Bonus and incentive pay: $1,950,000
Net revenues: $51.4 billion +0.3%
Fiscal year ended: 5/31/2024
4. Doug McMillon
Walmart Inc., president, CEO
Total compensation: $26,968,924 +6.6%
Base salary: $1,505,769
Stock and option awards: $19,608,750
Bonus and incentive pay: $4,500,000
Net revenues: $643 billion +6.1%
Fiscal year ended: 1/31/2024
5. Ernie Herrman
TJX Cos. Inc., president, CEO
Total compensation: $22,222,769 +8.3%
Base salary: $1,732,695
Stock and option awards: $10,900,088
Bonus and incentive pay: $7,950,096
Company revenues: $54 billion +9%
Fiscal year ended: 2/3/2024
6. Fabrizio Freda
The Estée Lauder Cos., president, CEO
Total compensation: $21,811,244 -14.3%
Base salary: $2,100,000
Stock and option awards: $15,625,008
Bonus and incentive pay: $3,773,050
Other compensation: $313,186
Net sales: $15.91 billion -10%
Fiscal year ended: 6/30/2023
7. Jon R. Moeller
Procter & Gamble Co., president, CEO
Total compensation: $21,715,625 +22.6%
Base salary: $1,600,000
Stock and option awards: $14,997,563
Bonus and incentive pay: $4,712,000
Net sales: $82 billion +2%
Fiscal year ended: 6/30/2023
8. Thibaut Mongon
Kenvue Inc. (formerly Johnson & Johnson consumer health business), CEO
Total compensation: $19,722,593
Base salary: $1,243,750
Stock and option awards: $14,932,319
Bonus and incentive pay: $3,518,750
Net sales: $15.44 billion +3.3%
Fiscal year ended: 12/31/2023
9. Ralph Lauren
Ralph Lauren Corp., executive chairman, chief creative officer
Total compensation: $19,720,137 +7.8%
Base salary: $1,750,000
Stock and option awards: $11,000,149
Bonus and incentive pay: $6,720,000
Net revenues: $6.6 billion +2.9%
Fiscal year ended: 3/30/2024
10. Brian Cornell
Target Corp., chair, CEO
Total compensation: $19,203,353 +8.7%
Base salary: $1,400,000
Stock and option awards: $14,720,515
Bonus and incentive pay: $2,613,800
Company revenues: $107 billion -1.6%
Fiscal year ended: 2/3/2024
11. Barbara Rentler
Ross Stores Inc., vice chair, CEO
Total compensation: $18,094,944 +59.6%
Base salary: $1,445,625
Stock and option awards: $10,700,095
Bonus and incentive pay: $5,800,000
Company revenues: $20 billion +9%
Fiscal year ended: 2/3/2024
12. Noel Wallace
Colgate-Palmolive Co., chairman, president, CEO
Total compensation: $17,121,584 +18.4%
Base salary: $1,475,000
Stock and option awards: $9,938,958
Bonus and incentive pay: $4,777,764
Other compensation: $929,862
Net sales: $19.46 billion +8.5%
Fiscal year ended: 12/31/2023
13. Jay Schottenstein
American Eagle Outfitters Inc., chairman, CEO
Total compensation: $16,793,219 +71.8%
Base salary: $1,817,308
Stock and option awards: $8,300,004
Bonus and incentive pay: $6,360,577
Company revenues: $5 billion +5.4%
Fiscal year ended: 2/3/2024
14. Patrice Louvet
Ralph Lauren Corp., president, CEO
Total compensation: $16,628,568 +14.9%
Base salary: $1,350,000
Stock and option awards: $10,651,323
Bonus and incentive pay: $4,536,000
Net revenues: $6.6 billion +2.9%
Fiscal year ended: 3/30/2024
15. Calvin McDonald
Lululemon Athletica Inc., CEO
Total compensation: $16,494,777 +5.3%
Base salary: $1,292,308
Stock and option awards: $9,999,948
Bonus and incentive pay: $5,169,231
Company revenues: $10 billion +18.6%
Fiscal year ended: 1/28/2024
16. Chip Bergh
Levi Strauss & Co., former chairman, CEO
Total compensation: $15,623,233 -1.5%
Base salary: $1,544,231
Stock and option awards: $11,949,250
Bonus and incentive pay: $1,741,215
Company revenues: $6 billion +0.2%
Fiscal year ended: 11/26/2023
17. Stefan Larsson
PVH Corp., CEO
Total compensation: $15,613,904 +28.6%
Base salary: $1,291,667
Stock and option awards: $11,101,772
Bonus and incentive pay: $2,784,080
Company revenues: $9 billion +2.1%
Fiscal year ended: 2/4/2024
18. Fran Horowitz
Abercrombie & Fitch Co., CEO
Total compensation: $15,035,354 +36.3%
Base salary: $1,401,923
Stock and option awards: $8,872,572
Bonus and incentive pay: $4,725,000
Company revenues: $4 billion +15.8%
Fiscal year ended: 2/3/2024
19. Richard Dickson
Gap Inc., president, CEO
Total compensation: $14,365,008
Base salary: $697,159
Stock and option awards: $11,542,892
Bonus and incentive pay: $1,802,511
Company revenues: $15 billion -4.7%
Fiscal year ended: 2/3/2024
20. Rosalind Brewer
Walgreens Boots Alliance, former CEO
Total compensation: $14,134,190 -18.2%
Base salary: $1,500,000
Stock and option awards: $10,639,786
Bonus and incentive pay: $0
Net sales: $139.1 billion +4.8%
Fiscal year ended: 8/31/2023
21. Michael Balmuth
Ross Stores Inc., executive chairman
Total compensation: $13,632,148 +14.1%
Base salary: $5,987,124
Stock and option awards: $3,500,092
Bonus and incentive pay: $4,000,000
Company revenues: $20 billion +9%
Fiscal year ended: 2/3/2024
22. Bracken Darrell
VF Corp., president, CEO since July 17
Total compensation: $13,535,399
Base salary: $919,945
Stock and option awards: $12,476,564
Bonus and incentive pay: $0
Company revenues: $10 billion -10%
Fiscal year ended: 3/30/2024
23. Jeff Gennette
Macy’s Inc., former chairman, CEO
Total compensation: $11,821,259 +6.9%
Base salary: $1,425,000
Stock and option awards: $8,226,596
Bonus and incentive pay: $1,753,630
Company revenues: $24 billion -6.2%
Fiscal year ended: 2/3/2024
24. Linda Rendle
Clorox Co., CEO
Total compensation: $11,649,650 +36.5%
Base salary: $1,168,269
Stock and option awards: $6,999,700
Bonus and incentive pay: $3,122,606
Net sales: $7.39 billion +4%
Fiscal year ended: 6/30/2023
25. Carol Meyrowitz
TJX Cos. Inc., executive chairman
Total compensation: $11,387,171 million +10.2%
Base salary: $1,060,000
Stock and option awards: $5,000,062
Bonus and incentive pay: $4,041,970
Company revenues: $54 billion +9%
Fiscal year ended: 2/3/2024
26. Matthew T. Farrell
Church & Dwight Co. Inc., chairman, president, CEO
Total compensation: $11,182,166 +33.5%
Base salary: $1,183,975
Stock and option awards: $7,232,300
Bonus and incentive pay: $2,530,700
Net sales: $5.87 billion +9.2%
Fiscal year ended: 12/31/2023
27. Martin Waters
Victoria’s Secret & Co., CEO
Total compensation: $10,925,251 -12.7%
Base salary: $1,250,000
Stock and option awards: $8,851,198
Bonus and incentive pay: $788,738
Company revenues: $6 billion -2.6%
Fiscal year ended: 2/3/2024
28. John Idol
Capri Holdings, chairman, CEO
Total compensation: $10,536,629 -26.5%
Base salary: $1,350,000
Stock and option awards: $8,499,971
Bonus and incentive pay: $540,000
Net revenues: $5.2 billion -8%
Fiscal year ended: 3/30/2024
29. Rod R. Little
Edgewell Personal Care, president, CEO
Total compensation: $10,157,128 +12.8%
Base salary: $1,095,833
Stock and option awards: $7,560,774
Bonus and incentive pay: $1,727,440
Net sales: $2.25 billion +3.7%
Fiscal year ended: 9/30/2023