This post is by Michelle Leder from footnoted*
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Last week, Ralph Lauren Corp. announced that it had hired a new CEO, Stefan Larsson, to take over the reins from the company’s namesake, Ralph Lauren. As expected, the passing of this type of baton got lots of coverage in the media.
But far more interesting to us was the 8-K that Ralph Lauren (the company) filed two days after the big media announcement. That’s because the filing included both an employment agreement with Larsson and an amended agreement with Ralph Lauren (the man).
First, the agreement with Larsson: his base salary was set at “not less than” $1.25 million with a target bonus of 3x that amount and a maximum of 4.5 times. He will also get a one-time equity award valued at $9.125 million, with the shares split more or less evenly between time-based and performance-based options. If Larsson is terminated without cause or voluntarily he would get 4 times his base salary for two years. As President of Old Navy, a unit of Gap Inc., Larsson’s salary was $1 million.
But far more interesting to us was the agreement with Lauren. That’s because under the amended agreement, he’ll continue to collect his base salary of $1.75 million and be eligible for his $9 million target bonus. The only real difference is the title: he’ll now be called Chief Creative Officer, instead of CEO.
We’ve written before about new high-profile executives still working in the shadows of the person they replaced (see here and here, for example). At Ralph Lauren, Larsson may actually wind up getting paid $500,000 less than the man he is replacing, which given the headlines, seems ironic at best.
In two weeks, I’ll be speaking at the annual Grant’s Conference in New York City. I have one ticket (face value: $2,150) that I would like to give away to a footnoted reader who sends me the best example of an interesting footnote that they’ve found in the past year in an SEC filing. A few rules: you must include a link to the SEC filing and you are responsible for paying your own expenses to the conference. I am only able to provide a ticket to the live event, so you need to be able to get to New York City on Oct. 20 on your own steam because the footnoted G-V is not available. Send entries to email@example.com.