You may not know it, but Ralph Lauren, founder of Ralph Lauren Corp. (RL), designs more than just clothes, towels, and bed linens. He also created an entire line of dishes and barware suitable for grand parties, which is handy, because we bet that he will be hosting a doozy of a fâ_te tomorrow.
Besides it being the 4th of July and the company recently getting news of a legal victory (a few weeks ago, the New York Supreme Court threw out a lawsuit filed by the City Pension Fund for Firefighters and Police in Pembroke Pines, Florida), Lauren has some great news of his own to celebrate.
An 8-K filed late yesterday disclosed that Lauren just signed a new employment agreement that runs through April 1, 2017. He’s getting a nice raise of $500,000 per year: His annual base salary will now be $1.75 million, and his target bonus for each year will be another $9 million (although he could earn as much as $13.5 million). And then there’s this:
“Under the New Employment Agreement, Mr. Lauren will also be entitled to an annual stock award grant with a target value of $14 million for each fiscal year during the term of the New Employment Agreement.”
Note that it doesn’t say he could earn a stock award worth up to $14 million, but rather that he “will also be entitled” to one. It’s not a matter of “if,” but rather “how much.” One-third of the award will be in the form of stock options, and the other two-thirds will be in the form of restricted performance share units (RPSUs). There are some pretty complicated vesting criteria and rules that can’t be summarized easily, but they’re in the filing if you’re interested.
A carryover term from his prior employment agreement still requires Lauren to “fly on his own or other private aircraft for security purposes,” and it goes on to say that the company will continue to reimburse him for up to $200,000 for any private aircraft travel expenses that he incurs, regardless of whether they were for business or personal trips.
As luck would have it, the company also filed its proxy yesterday. From that filing, we discovered that Lauren’s total compensation rose more than $6.6 million from the prior fiscal year (it increased from $29.7 million in fiscal 2011 to $36.3 million in fiscal 2012). The biggest gains were in his stock awards ($10 million, compared to $5.6 million the prior year) and stock option awards ($5.2 million, compared to $2.98 million the year before). His salary was the same as it had been for the two prior years ($1.25 million), and his non-equity incentive bonus remained at $19.5 million. The rest of his compensation for fiscal 2012 was for a car and driver, a $200,000 reimbursement for personal travel, and travel insurance.
There’s more — much more — that we could report from the filings, but there is only so much celebrating that a person can handle at any one time. We’ll leave those regulatory sparklers for another day.
To our readers: We wish you a happy and safe 4th of July celebration. We’ll be back Thursday with more gems from SEC filings!