Helen of Troy Exec Wins Without Trojan Horse…

June 30, 2010

English poet/playwright Christopher Marlowe described Helen of Troy as having the —face that launched a thousand ships.

Following the lead of its namesake, Helen of Troy Ltd. (HELE) — a company that launched or is licensed to sell at least 45 well-known consumer products with labels such as Vidal Sassoon, Revlon, and Dr. Scholl’s — has been fighting a different cause for the past few years— the battle for higher revenues.

Leading the charge is Gerald Rubin, the Chairman/CEO/President of the company, who co-founded the company with his wife, Stanlee, decades ago. The company filed its proxy on June 28, and it caught our attention for a couple of reasons.

Rubin has an employment agreement that —automatically renews daily for a three year term. He gets a base salary of $600,000 per year — a number that the company states is lower than CEOs at similarly-situated companies. The proxy explains:

—His salary has remained at this level since 1999, with no increases for inflation or cost of living adjustments. The Compensation Committee has not sought to increase Mr. Rubin’s salary because it believes that the majority of our Chief Executive Officer’s compensation should be attributed to the profitability of the Company—.

The company set up a system (the —1997 Cash Bonus Performance Plan — in which Rubin is the only participant) that gives Rubin a cash bonus that is —directly related to the profitability of the company. There’s a sliding scale that determines whether Rubin will get from 5 percent (for fiscal year earnings from $0 to $30 million) up to 10 percent (if the revenues reach $70,000,001 or more).

Since the FY 2010 revenues as computed under the bonus plan increased to $88.1 million, Rubin got a cash bonus of $8,213,019. That’s a big improvement over fiscal 2009, when Helen of Troy had a loss of $51,465,000 and Rubin got no bonus at all. It’s also a nice jump from 2008, when his bonus was $5.05 million, or FY 2007, when it was $4.11 million.

As with any battle, the company has made progress and suffered setbacks. In January, 2010, the shares dropped 5.3 percent after sales didn—t meet expectations. The stock fell again in March after an analyst downgraded the stock from —outperform to the dreaded —underperform. More recently, though, the company has made progress. On June 25, Helen of Troy’s rating was raised to —neutral.

Giving an executive an $8.2 million bonus is noteworthy by itself. But it’s also refreshing to find a company that doesn—t try to bend the rules of a plan when the numbers don—t work out in its CEO’s favor. Like the Greeks, it seems that Rubin intends to win.

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