Less than zero…

July 10, 2006

As much as we hate to poke at the same company so soon, we couldn’t help but notice the proxy that Polo Ralph Lauren (RL) filed Friday afternoon. Not for what was in the proxy, mind you, but mostly for what wasn’t in it.

For example, footnote #1 in the summary compensation table says that "as permitted by the SEC’s rules, excludes Other Annual Compensation that did not exceed, in the aggregate, the lesser of $50,000 and 10% of the total salary and bonus of the Named Executive Officer" but tells you absolutely nothing about Ralph Lauren’s "other annual compensation" of $137.7K. Ditto for footnote #3, which helpfully notes that Lauren’s "other annual compensation" of  $91K is not part of the "Supplemental Executive Retirement Plan", but doesn’t say what the money is for. There’s also a $15 million bonus  — or 15 times Lauren’s $1 million salary which the proxy notes in the maximum available to him for 2006 — but provides few details, unless you count the usual legal mumbo-jumbo, on how that number was achieved. There’s also the fact that Lauren received 11% of all options granted to employees last year.

Moving deeper into the proxy into "certain relationships", there’s additional missing links. We see that three company employees perform full-time services for Ralph Lauren and that certain other creative employees perform "non-company-related services" for the designer. And while Lauren does reimburse the company for those expenses — $417K in 2006 — it’s not clear why the domestic employees, in particular, are on the company payroll. Anything else? There’s the $324K that Lauren received from the company for use of his plane by unnamed company employees for unidentified business. And, the two Lauren relatives, Ralph’s brother, Jerome and his son, David, whose job titles are known, but whose salaries remain a big mystery.

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