Planning ahead for next season…

flagthumbnail.jpgBack in 2003, designer Ralph Lauren signed this employment contract with the company Ralph Lauren (RL) that lasted through March 2008. Now, granted, designers are known for planning ahead, but it still seemed a bit odd that the company would finalize Lauren’s next employment contract nearly nine months before the current one expires. The new contract, which is effective as of March 30, 2008, was filed late yesterday.

Among the differences between the two contracts are the salary, which increases by $250K and the target bonus, which increases by $1 million to $13 million. The new contract also has fewer options (100,000 vs. 150,000) and restricted stock (75,000 vs. 100,000). Given the huge run-up in the company’s stock, it’s hard to quibble with these seemingly modest tweaks. Much of the language regarding termination (for cause, etc..) remains the same too.

Which begs the question: Why finalize the new contract now?