Being vice is still the best job in business!

September 3, 2015

Over 10 years ago, I wrote this piece for Slate about how being named Vice Chairman of a company just might be the greatest job in business. Here’s a brief snip:

There are no magazines about vice chairmen and no suck-up profiles in Fortune about them. They don’t write advice books, because no one cares what they have to say. No one even cares if they show up in the office. In short—except for one slight drawback—they have the greatest job in business

I was reminded of that piece when I came across this exhibit in the 10-Q that PVH filed a short time ago. Under the agreement, Fred Gehring, the former Executive Chairman (and before that the former CEO) of Tommy Hilfiger, was demoted to Vice Chairman on Aug. 1.

That’s not quite how the company put it in the July 31 press release, but that’s how most people would read it.

While the company disclosed the terms of its agreement with Gehring in the 8-K that accompanied that release (we flagged it at the time for our Pro subscribers), it did not include the actual agreement until today’s filing. Here’s a quick summary:

Gehring will be paid €500,000 — or about half of what he made as Executive Chairman. But he’ll only be expected to work the equivalent of 20-30% of his normal hours, which seems like a pretty good gig. He’ll also get €500,000 worth of stock awards for each year of the agreement. There’s also vacation time too, just in case working 20-30% becomes too strenuous.

But the real award comes from a €3 million “special cash bonus”. Unfortunately, that award has some strings attached. As the filing notes “if you challenge any termination by the Company of your employment or seek any compensation in connection with any termination of employment, then the Company may demand, and you shall return to the Company within 30 days of such demand, an amount equal to €1,000,000 gross.” Notice the word termination here, which wasn’t in the press release.

The agreement appears to be valid for the next 5 years — until Gehring turns 65 — although either party can terminate on 45 days of notice.

“It’s a great title for a position where you don’t have to do anything,” says Tom McLane, who happens to be vice chairman of the Directorship Search Group, an executive search firm based in Greenwich, Ct. told me 10 years ago.

The same appears to be true today.

Posted in: Agreements, Compensation, D&O Turnover

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Companies Mentioned: PVH Corp,
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