Apparel executives of U.S. publicly held companies with the highest annual compensation packages, including salary and bonus, but not long-term incentives.
Though there are changes in the executive suite among vendors, there is still lots of jingle in executive pockets. For example, Phillips-Van Heusen veteran Mark Weber stepped down this year as chief executive officer after only eight months, but still collected a sizable paycheck. The message is that bonuses these days go with the executive territory, especially for top performers. Ralph Lauren’s $15 million bonus for piloting his company to significant profit growth is the winner in that category. Still, more conditions, such as non-compete clauses, are being added to employment contracts, noted Elaine Hughes, president of executive search firm E.A. Hughes. “People are trying to hang onto key executives with contracts,” she said. Another change afoot, she noted, is the appearance of stay bonuses given during company transitions.
1. Ralph Lauren, 66, chairman and ceo, Polo Ralph Lauren Corp.
2005 total annual compensation: $16.14 million; percent change: 12.2
Salary: $1 million; bonus: $15 million; other annual compensation: $137,740
The designer tops the list for the second year in a row, thanks to his company’s ongoing growth — Polo Ralph Lauren scored a 62 percent profit gain last year. The reason: retail and international expansion, expansion of categories such as footwear and handbags and strong licensing sales. This year looks equally golden. Polo added new fragrances to its line and bought a footwear unit from Reebok. “Demand for our luxury products around the world is accelerating,” Lauren said in February.
2. Robert Margolis, 58, chairman and ceo, Cherokee Inc.
2005 total annual compensation: $4.44 million; percent change: 5.6
Salary: $760,000; bonus: $3.68 million
Head honcho since 1995, Margolis has helped forge the company’s strong growth. Cherokee mainly licenses trademark brands, and half its merchandise is sold through Target. The company tried to buy Mossimo this year, but instead ended up walking away with a $33 million fee paid by the final winner, Iconix.
3. Peter Boneparth, 46, president and ceo, Jones Apparel Group
2005 total annual compensation: $3.96 million; percent change: -13.9
Salary: $2.5 million; bonus: $1.2 million; other annual compensation: $265,016
The former investment banker has had a rocky road since taking over Jones Apparel in 2002. In addition to steady profit declines — including last year — Jones recently had another setback when a planned sale of the company produced no acceptable bids. Thus Boneparth’s bonus, partially tied to profits and earnings, tumbled last year.
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4. Reed Krakoff, 42, president and executive creative director, Coach Inc.
2005 total annual compensation: $3.81 million; percent change: 26.8
Salary: $1.21 million; bonus: $2.26 million; other annual compensation: $345,822
The man behind Coach’s new looks bounded onto the list this year. Krakoff’s formula: price, fashion and fabrication, which helped propel Coach’s profits up 48.5 percent last year. The next project is Legacy shops, scheduled to roll out in September, for which Krakoff tried his hand at shooting the ad campaign.
5. Roger Farah, 53, president and chief operating officer, Polo Ralph Lauren Corp.
2005 total annual compensation: $3.73 million; percent change: 13.2
Salary: $900,000; bonus: $2.83 million
The Polo luster also has rubbed off on Farah, who praises its “fabulous products” for the company’s stellar results. And he protects the brand as much as Ralph Lauren: Farah revealed plans to close the U.S. Polo jeans operation next year, after buying the business for $255 million in February. His comment: the jeans were “run down a bit, overpromoted and overdistributed.” Farah’s employment contract, including an annual incentive bonus, was extended until 2010 a few years ago.
6. Bruce J. Klatsky, 57, chairman and former ceo, Phillips-Van Heusen Corp.
2005 total annual compensation: $3.72 million; percent change: 7.2
Salary: $1.2 million; bonus: $2.5 million
Despite stepping down as ceo last year, Klatsky’s momentum carried PVH through another strong sales year. Klatsky handpicked his successor, Mark Weber, a longtime associate, to follow in his footsteps. Though Weber stepped down as ceo this year, Klatsky has said that he’ll stay on as chairman. Klatsky helped drive the acquisition of Calvin Klein Inc., which he says has the potential to generate between $5 billion and $6 billion in global revenues.
7. Mark Weber, 57, former ceo, Phillips-Van Heusen Corp.
2005 total annual compensation: $3.15 million; percent change: 34.1
Salary: $1.06 million; bonus: $1.92 million
Weber only served as head of PVH for eight months before being let go by the company’s board. The reason, said sources, was that his aggressive, micromanaging style created clashes. This year he’ll reap a golden parachute worth at least $8 million (or three times his average base salary and bonus), and he is said to be in the running for the ceo post at Donna Karan International.
8. Paul Charron, 63, chairman of the board and ceo, Liz Claiborne
2005 total annual compensation: $2.81 million; percent change: -37
Salary: $1.5 million; bonus: $1.12 million
Charron is lauded by retailers for his focus on merchandising and marketing as well as execution. But the past year was lackluster, which was the reason for the decline in his total pay. Charron has set many changes in motion, such as cutting $60 million in costs and laying off 500 employees. His employment contract ends in December, and the race is on to find a successor.
9. Jackwyn Nemerov, 54, executive vice president, Polo Ralph Lauren Corp.
annual compensation: $2.79 million; percent change: 95.6
Salary: $900,000; bonus: $1.89 million
A top executive at Polo since 2004, Nemerov sprints onto the list this year. Formerly a president at Jones Apparel Group until 2002, Nemerov was slapped with a lawsuit by her former employer. It sought to enforce the non-compete confidentiality agreement in her employment contract. Jones alleged that when Nemerov resigned, she took “confidential Jones information on the Lauren line and then misused the information as a consultant for Polo.” Polo’s response: the case had no merit. The disagreement was resolved earlier this year, the company said.
10. Robert B. McKnight Jr., 52, chairman and ceo, Quiksilver Inc.
2005 total annual compensation: $2.6 million; percent change: -17.7
Salary: $880,000; bonus: $1.66 million
The company founder who once sold Quiksilver’s surfer wares on California boardwalks, McKnight has presided over strong company growth. Last year, profits rose more than 30 percent. McKnight’s bonus took a hit, however, due to accounting changes and how bonuses are reported at Quiksilver.
Source: Company reports and filings