Aeropostale Exec Set for a Trendy Retirement…

Although leading an uber-cool company like Aeropostale, Inc. (ARO) surely had many rewards, more will soon flow to former CEO Julian Geiger, who led the company since 1996. Geiger stepped down as CEO of Aeropostale on February 12, 2010, ceding the post to co-CEOs Mindy Meads and Thomas Johnson. But Geiger’s still connected to the company; he serves as its Chairman and a part-time advisor.

While scanning the quarterly report that Aeropostale filed June 4, we noticed a huge payout that the company will make this August. That prompted us to do more digging to see what else we could find about the cost of this executive transition.

The Q disclosed:

“We expect to make a payment to Mr. Geiger from our Supplemental Executive Retirement Plan (SERP) of approximately $16.5 million in August 2010. Accordingly, the SERP liability related to Mr. Geiger has been classified as a current liability in our consolidated balance sheet as of May 1, 2010 and January 30, 2010. Such amount will be paid from our cash flows from operations. At the date of payment to Mr. Geiger, we will record a charge of approximately $5.7 million in selling, general and administrative expenses, with a corresponding amount recorded to relieve accumulated other comprehensive loss included in our stockholder’s equity—.”

The company actually announced Geiger’s intended transition in a press release September 24, 2009, but the SERP payment’s size wasn’t disclosed until Aeropostale filed its quarterly report on December 4, 2009. (To be clear, the company had disclosed that Geiger was entitled to receive money from his SERP account when he retired, but – at the time of the May, 2009 proxy – that amount was approximately $14.8 million.) After noting that the amount of the payment would fluctuate, depending on when Geiger exercised his right of election to end his service as CEO, Aeropostale stated that the company expected to spend another half million in —selling, general and administrative expenses associated with the —accelerated vesting of Mr. Geiger’s remaining stock awards.” (The company also gave Meads and Johnson stock grants of $1 million each because of their promotions.)

Geiger also got $8,194,615 in 2009 in “Other Compensation,” according to the proxy that Aeropostale filed May 7, 2010. That’s on top of the $4.3 million he got in salary, non-equity incentive plan compensation, and the appreciation of his pension benefits. The company explained the nearly $8.2 million in the following footnote:

—In accordance with the terms of Mr. Geiger’s Employment Agreement, this amount represents certain cash payments made during 2009 which were in lieu of other benefits Mr. Geiger had received during prior years of his employment with the Company, including the replacement of (i) annual equity awards and (ii) the increase in retirement benefits.

And then there’s Geiger’s new job as a part-time advisor. We found the details on that arrangement in the March 29, 2010 annual report, which stated:

—In connection with his advisory role, Mr. Geiger will receive an annual advisory fee of $250,000 and an annual grant of not less than 30,000 shares, or more than 60,000 shares of restricted stock, depending upon Company performance during that fiscal year.

Although Aeropostale is currently trading at a little less than $28.00 per share, even the minimum annual grant of 30,000 shares would be worth $831,600.

Considered cumulatively, Geiger should have more than enough money for a trendy – and comfortable – retirement.


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