UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
RALPH LAUREN CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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5 | | | 2021 PROXY STATEMENT |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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2021 PROXY STATEMENT | | | 6 |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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2021 ANNUAL MEETING OF STOCKHOLDERS
Thursday, July 29, 2021 9:30 a.m. Eastern Time |
Held virtually online via live webcast at www.virtualshareholdermeeting.com/RL2021 |
Record Date:
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Close of business on June 1, 2021, (the Record Date). |
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Participating in the Annual Meeting:
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We invite you to join the 2021 Annual Meeting of Stockholders (the 2021 Annual Meeting or Meeting) online via live webcast. There will not be a physical meeting in New York City. You will be able to participate in the virtual Meeting online, vote your shares electronically, and submit your questions during the Meeting by visiting: www.virtualshareholdermeeting.com/ RL2021 (the Annual Meeting Website). Prior to the meeting, you may vote your shares and submit pre-meeting questions online by visiting www.proxyvote.com and following the instructions on your proxy card.
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Please note that stockholders will need their unique control number which appears on their Notice of Internet Availability, the proxy card (printed in the box and marked by the arrow), and the instructions that accompanied the proxy materials in order to access these sites. Beneficial stockholders who do not have a control number may gain access to the meeting by logging into their broker, brokerage firm, bank, or other nominees website and selecting the shareholder communications mailbox to link through to the Meeting. Instructions should also be provided on the voting instruction card provided by your broker, bank, or other nominee.
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Virtual Meeting Highlights: |
All of our stockholders will be able to hear directly from Mr. Ralph Lauren, our Founder and Executive Chairman, Mr. Patrice Louvet, our President and CEO, and the rest of our Board of Directors, regardless of location. |
To ensure access, all validated stockholders may submit questions in advance, beginning on June 17, 2021, by visiting www.proxyvote.com, and may submit questions during the Meeting by visiting the Annual Meeting Website at www.virtualshareholdermeeting.com/ RL2021. All relevant questions received in accordance with the Meetings Rules of Conduct (available on the Annual Meeting Website) during the course of the Meeting or solicited in advance, as well as the Companys responses, will be posted on http://investor.ralphlauren.com soon after the 2021 Annual Meeting.
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Stockholders will be able to review the Rules of Conduct and other Meeting materials on the 2021 Annual Meeting Website.
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An audio replay of the 2021 Annual Meeting will be available on http://investor.ralphlauren.com until the 2021 Annual Meeting of Stockholders.
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Voting: | Only holders of record of the Companys Class A and Class B Common Stock at the close of business on June 1, 2021 are entitled to notice of, and to vote at, the 2021 Annual Meeting, or at any adjournments or postponements thereof. |
Please authorize a proxy to vote your shares as soon as possible. If you are a beneficial owner of shares of our common stock, your broker will NOT be able to vote your shares with respect to any of the matters presented at the Meeting other than the ratification of the selection of our independent registered public accounting firm, unless you give your broker specific voting instructions.
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You do not need to participate in the 2021 Annual Meeting webcast to vote if you submitted your proxy in advance of the 2021 Annual Meeting.
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See the Questions and Answers About the Annual Meeting and Voting section on page 105 of this proxy statement for more information.
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7 | | | 2021 PROXY STATEMENT |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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MATTERS TO BE VOTED ON
Item for Business | Board Recommendation | Further Details | ||
1. Election of 12 Directors |
FOR ALL | Page 18 | ||
2. Ratification of
appointment of independent |
FOR | Page 102 | ||
3. Advisory vote on executive compensation |
FOR | Page 104 |
DIRECTOR NOMINEES
Name | Occupation | Age |
Director Since |
Independent |
Other Current Public Company Directorships |
Committees1 |
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Class A Directors |
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Michael A. George |
President and Chief Executive Officer Qurate Retail, Inc. |
59 | 2018 | 1 |
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Hubert Joly2 |
Formerly Executive Chairman of the Board of Directors Best Buy Co., Inc. |
61 | 2009 | 1 |
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Linda Findley Kozlowski |
President and Chief Executive Officer Blue Apron Holdings, Inc. |
48 | 2018 | 1 |
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Class B Directors |
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Ralph Lauren |
Executive Chairman and Chief Creative Officer | 81 | 1997 |
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Patrice Louvet |
President and Chief Executive Officer | 56 | 2017 |
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David Lauren |
Chief Innovation Officer, Vice Chairman of the Board and Strategic Advisor to the CEO | 49 | 2013 |
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Angela Ahrendts |
Formerly Senior Vice President, Retail Apple, Inc. |
61 | 2018 | 2 |
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John R. Alchin |
Retired Executive Vice President and Co-Chief Financial Officer Comcast Corporation |
73 | 2007 | 1 |
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Frank A. Bennack, Jr.3 |
Executive Vice Chairman and Chairman of the Executive Committee The Hearst Corporation | 88 | 1998 | 0 |
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Valerie Jarrett4 |
Senior Distinguished Fellow University of Chicago Law School |
64 | 2020 | 3 |
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Judith A. McHale |
President and Chief Executive Officer Cane Investments, LLC |
74 | |
2001- 2009, 2011 |
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Darren Walker |
President Ford Foundation |
61 | 2020 | 2 |
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1. | A refers to the Audit Committee of the Board (the Audit Committee), C refers to the Compensation & Organizational Development Committee of the Board (the Compensation Committee), N refers to the Nominating, Governance, Citizenship & Sustainability Committee of the Board (the Nominating Committee), and F refers to the Finance Committee of the Board (the Finance Committee). |
2. | In Fiscal 2022, the Board refreshed the Lead Independent Director role and approved the appointment of Mr. Joly to serve as our new Lead Independent Director, effective following Mr. Jolys election as a Class A director at the 2021 Annual Meeting. In this new role, Mr. Joly will be invited to attend all Committee meetings following the 2021 Annual Meeting of Stockholders. |
3. | Mr. Bennack is currently a Class A Director and our current Lead Independent Director. He will stand for re-election to our Board at the 2021 Annual Meeting as a Class B director, after which he will no longer serve as our Lead Independent Director or as a member of the Compensation Committee. |
4. | Upon her appointment at the 2021 Annual Meeting, the Board expects to appoint Ms. Jarrett to the Nominating Committee. |
2021 PROXY STATEMENT | | | 8 |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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DIRECTOR NOMINEES HIGHLIGHTS
Our Board is comprised of individuals with diverse business experiences, including financial expertise, active leadership, CEO experience in a variety of industries, international experience, product and channel experience, strong retail and digital commerce experience, and corporate citizenship, sustainability, regulatory and non-profit experience, and reflects diversity of gender, race, ethnicity, age, and international perspective. In the Boards annual self-evaluation, one of the factors that the Board expressly considers is whether the membership of the Board provides an adequate mix of characteristics, experience, and skills to serve the Company and its stockholders effectively.
Balanced Mix of Skills, Qualifications and Experience |
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Attributes/Experiences | CEO1 | International Experience |
Other Public Company |
Retail/ Consumer Products |
Digital | Strategic Planning |
Finance/ Capital Allocation |
Marketing/ Sales |
Legal/ Regulatory Governance |
Citizenship & Sustainability |
Philanthropy | Diversity | ||||||||||||
Angela Ahrendts | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
John Alchin | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
Frank A. Bennack, Jr. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Michael A. George | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
Valerie Jarrett | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Hubert Joly | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
Linda Findley Kozlowski | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
David Lauren | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
Ralph Lauren | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
Patrice Louvet | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
Judith McHale | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
Darren Walker | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
1 Current or former CEO experience, public and private |
For further information on these attributes and experiences, and a summary of individual skill sets, see page 19.
9 | | | 2021 PROXY STATEMENT |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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2021 PROXY STATEMENT | | | 10 |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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Total Shareholder Return (TSR) Performance
Our TSR for recent periods, relative to our compensation comparator group detailed on page 76 of the Compensation Discussion and Analysis (CD&A) and the S&P 500, is set forth below. TSR is based on stock price appreciation, plus dividends reinvested, with starting and ending share prices based on average closing stock prices for the 20 trading days ending immediately prior to the beginning and end of the performance period. Results are varied with the Company outperforming our compensation comparator group for the three- and five-year periods ended Fiscal 2021 but behind the comparator group in the one year period ended Fiscal 2021 and behind the S&P 500 Index for the one-, three-, and five-year periods ended Fiscal 2021.
11 | | | 2021 PROXY STATEMENT |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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2021 PROXY STATEMENT | | | 12 |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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13 | | | 2021 PROXY STATEMENT |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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2021 PROXY STATEMENT | | | 14 |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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15 | | | 2021 PROXY STATEMENT |
PROXY SUMMARY
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RALPH LAUREN CORPORATION
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Please see page 41 for more information. Our most recently published Global Citizenship & Sustainability Report covering Fiscal 2021 and related events prior to publication in Fiscal 2022 may be found on our corporate website at https://corporate.ralphlauren.com/citizenship-and-sustainability.
2021 PROXY STATEMENT | | | 16 |
PROPOSAL 1
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RALPH LAUREN CORPORATION
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CLASS A DIRECTOR NOMINEES FOR ELECTION
Michael A. George
Age 59
Mr. George has been a director of the Company since May 2018. He has served as the President of QVC, Inc. (QVC) since November 2005 and as its Chief Executive Officer since April 2006. In 2018, he was named CEO of QVCs parent, Liberty Interactive, which was subsequently renamed Qurate Retail, Inc. Mr. George previously held various positions with Dell, Inc. (Dell) from March 2001 to November 2005, most notably as the Chief Marketing Officer and Vice President and General Manager of Dells U.S. consumer business. Prior to that, Mr. George was a senior partner at McKinsey & Company and led the firms North American Retail Industry Group. Mr. George previously served on the board of directors of Brinker International, currently serves on the board of directors of Qurate Retail, Inc., chairs the board of directors of the National Retail Federation, and serves on the boards of several not-for-profit organizations. The Board has determined that Mr. George is an audit committee financial expert.
Experience, Qualifications, Attributes and Skills
Mr. George brings to our Board extensive business experience through his role as President and Chief Executive Officer of QVC and Chief Executive Officer of Qurate Retail Group. His distinguished career, including his prior experience at Dell and McKinsey, provides him with critical perspective on operational and strategic issues facing the retail industry. As a result of his service as a member of the boards of other public companies and not-for-profit organizations, he also provides our Board with valuable insights regarding governance and other significant matters that come before our Board.
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Hubert Joly
Age 61
Mr. Joly has been a director of the Company since June 2009 and will serve as the Lead Independent Director of the Board following his election at the 2021 Annual Meeting. He is the former Chairman and Chief Executive Officer of Best Buy Co., Inc. (Best Buy) where he served from 2012 to 2020. In addition, Mr. Joly is currently a member of Johnson & Johnsons Board of Directors, a senior lecturer at Harvard Business School, and a member of the board of trustees of the Minneapolis Institute of Art. Previously, he served as President and Chief Executive Officer of Carlson from 2008 to 2012, after he joined Carlson in 2004 as President and Chief Executive Officer of Carlson Wagonlit Travel. He also previously served as Executive Vice President, American Assets at Vivendi Universal from 2002 to 2004 and in various other positions at Vivendi Universal since 1999. He previously served on the boards of Carlson, The Rezidor Hotel Group, Carlson Wagonlit Travel, and the World Travel and Tourism Council.
Experience, Qualifications, Attributes and Skills
Mr. Joly brings to our Board extensive management and leadership experience obtained as Chairman and Chief Executive Officer of Best Buy, as a director of Johnson & Johnson, as a member of the faculty at Harvard Business School, and formerly as President and Chief Executive Officer of Carlson and Carlson Wagonlit Travel. His positions give him critical insights into the issues facing a large international corporation, as well as unique perspective on issues and opportunities facing a large multi-channel retailer. Based on his current and past positions at Best Buy, Johnson & Johnson, Harvard Business School, Carlson, Carlson Wagonlit Travel, Vivendi Universal, Electronic Data Systems, and McKinsey & Company, Mr. Joly possesses a deep understanding of international issues affecting us and he provides our Board with valuable insight in the areas of leadership, governance, finance, financial reporting, and strategic planning.
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19 | | | 2021 PROXY STATEMENT |
PROPOSAL 1
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RALPH LAUREN CORPORATION
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Linda Findley Kozlowski
Age 48
Ms. Kozlowski has been a director of the Company since August 2018. Ms. Kozlowski has served as the President, Chief Executive Officer of Blue Apron Holdings, Inc. (Blue Apron) since April 2019. Prior to that, she served as COO of Etsy, Inc., (Etsy) with responsibility for product, design, marketing. and customer engagement and acquisition. Prior to Etsy, Ms. Kozlowski was COO of Evernote, where she oversaw worldwide operations, and led cross-functional teams in offices across seven countries. Previously, she was based out of Hong Kong and led global marketing, business development, and customer service for Alibaba.com. She has also held leadership positions in communications firms including Fleishman-Hillard, Text 100, and Schwartz Communications. Ms. Kozlowski holds a Masters degree in Journalism from UNC-Chapel Hill and an undergraduate degree in Corporate Communications from Elon University.
Experience, Qualifications, Attributes and Skills
Ms. Kozlowski has more than 25 years of experience in operations, international marketing, business development, public relations, and customer service. As President and CEO of Blue Apron, she is responsible for the entire strategy and operations of the business. As COO of Etsy, she was responsible for all revenue generating and go to market activities including product management, marketing, design, international expansion, and branding/communications. As COO of Evernote, she oversaw worldwide operations that drove revenue and global growth. She led cross-functional teams in offices across 10 countries. With a strong emphasis on global growth, Ms. Kozlowskis work at Etsy included growth across North America, Asia, Europe, Africa, Latin America, and Russia. She drives strategies and programs that balance global efficiency with local teams. These programs drive both user-growth and monetization strategies, as well as scalable customer experience management to maintain brand and positive user engagement.
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2021 PROXY STATEMENT | | | 20 |
PROPOSAL 1
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RALPH LAUREN CORPORATION
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CLASS B DIRECTOR NOMINEES FOR ELECTION
Ralph Lauren
Age 81
Mr. R. Lauren founded our business in 1967 and, for over five decades, has cultivated the iconography of America into a global lifestyle brand. He is currently our Executive Chairman and Chief Creative Officer and has been a director of the Company since prior to our initial public offering in 1997. He had previously been our Chairman and Chief Executive Officer since prior to our initial public offering in 1997 until November 2015. In addition, he was previously a member of our Advisory Board or the Board of Directors of our predecessors since their organization.
Experience, Qualifications, Attributes and Skills
Mr. R. Lauren is an internationally recognized fashion designer. His unique role as our Founder and Chief Creative Officer, as well as his experience as our previous Chief Executive Officer, provides our Board with valuable leadership, including in the areas of design, brand management, and marketing. Mr. R. Laurens contributions to us since the founding of our business have been instrumental in defining our image and direction. As one of the worlds most innovative design leaders and a fashion icon, his career has spanned over five decades that have resulted in numerous unique tributes for his role within the fashion industry. He is uniquely qualified to bring strategic insight, experience, and in-depth knowledge of our business and the fashion industry to the Board.
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Patrice Louvet
Age 56
Mr. Louvet has served as our President and Chief Executive Officer since July 2017. Prior to joining the Company, he served as the Group President, Global Beauty, of Procter & Gamble Co. (P&G) since February 2015. Prior to that role, Mr. Louvet held successively senior leadership positions at P&G, including the roles of Group President, Global Grooming (Gillette), and President of P&Gs Global Prestige Business. Before he joined P&G, he served as a Naval Officer, Admiral Aide de Camp in the French Navy from 1987 to 1989. Mr. Louvet graduated from École Supérieure de Commerce de Paris and received his M.B.A. from the University of Illinois. He has served as a member of the board of directors of Bacardi Limited since July 2012 and as a member of the board of directors of the National Retail Federation since January 2020.
Experience, Qualifications, Attributes and Skills
Mr. Louvet brings significant leadership and business experience to the Board. His over 25 years in the consumer products industry, with oversight of multiple major global business units, have provided him with a deep understanding of building and growing brands. His position as the Companys President and Chief Executive Officer provides our Board with valuable perspective into the issues and opportunities facing the Company. Mr. Louvets extensive background in managing internationally renowned prestige brands, along with his substantial experience in driving business transformation and innovation, provides our Board with critical strategic insights into our global business.
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21 | | | 2021 PROXY STATEMENT |
PROPOSAL 1
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RALPH LAUREN CORPORATION
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David Lauren
Age 49
Mr. D. Lauren is our Chief Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board. From November 2010 to October 2016, he served as our Executive Vice President of Global Advertising, Marketing, and Communications. Prior to that, he served in numerous leadership roles at the Company with responsibility for advertising, marketing, and communications. He has been a director of the Company since August 2013. Mr. D. Lauren oversees the Companys innovation strategy, processes, and capabilities to drive its brand strength and financial performance across all channels. He has been instrumental in growing the Companys global digital commerce business and pioneering our technology initiatives. He serves on the board of directors of The National Museum of American History. Mr. D. Lauren is also the President of The Ralph Lauren Corporate Foundation (formerly known as The Polo Ralph Lauren Foundation). Before joining the Company in 2000, he was Editor-In-Chief and President of Swing, a general interest publication for Generation X. Mr. D. Lauren is the son of Mr. R. Lauren.
Experience, Qualifications, Attributes and Skills
Mr. D. Lauren brings strong leadership and business experience to our Board. He has been instrumental in the development of the Companys digital commerce business and the use of innovative marketing to build the Companys global fashion image as it has expanded internationally. Mr. D. Lauren has been recognized as a leader on the use of new technologies in retail marketing and on using digital platforms to market luxury brands. His in-depth knowledge of these areas and his current position as our Chief Innovation Officer and Vice Chairman of the Board provides our Board with valuable insight and perspective into our global digital, digital commerce, and technology initiatives.
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Angela Ahrendts
Age 61
Ms. Ahrendts has been a director of the Company since August 2018. She most recently served as the Senior Vice President, Retail of Apple Inc. (Apple) from May 2014 through April 2019. Prior to Apple, Ms. Ahrendts joined Burberry Group plc in January 2006 where she served as a director and Chief Executive Officer beginning in July 2006. She also previously served as Executive Vice President at Liz Claiborne, Inc., as President of Donna Karan International, Inc., and as a member of the United Kingdoms Prime Ministers Business Advisory Council. Ms. Ahrendts currently serves on the board of directors of Airbnb, Inc., WPP plc., Charity: Water, and the How Institute for Society.
Experience, Qualifications, Attributes and Skills
Ms. Ahrendts brings to our Board substantial business and leadership experience. Her most recent position as Apples Senior Vice President, Retail and Online Stores, and her prior positions at multiple major fashion and apparel companies, such as Burberry, a luxury fashion company, Liz Claiborne, and Donna Karan, give her extensive experience with strategy, real estate and development, operations of physical stores, online stores and contact centers, as well as profound insights into the challenges and opportunities facing our industry. Her extensive background in guiding the retail strategy of renowned international brands, as well as her proven leadership track record in driving successful brand and business transformations, enable her to provide our Board with critical perspective and insight on business, operational, and strategic issues facing the Company.
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2021 PROXY STATEMENT | | | 22 |
PROPOSAL 1
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RALPH LAUREN CORPORATION
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John R. Alchin
Age 73
Mr. Alchin has been a director of the Company since February 2007. He served as Executive Vice President and Co-Chief Financial Officer and Treasurer of Comcast Corporation, a broadband cable provider offering a variety of consumer entertainment and communication products and services, from November 2002 to December 2007. Prior to that, he served as Executive Vice President and Treasurer of Comcast Corporation from January 2000 to November 2002. Mr. Alchin joined Comcast Corporation in 1990 as Senior Vice President and Treasurer. He is currently a member of the board of trustees of BNY Mellon Funds Trust, the board of trustees of the Philadelphia Museum of Art (PMA), the board of trustees of The Barnes Foundation, and the advisory group of Catalyst Investors. Mr. Alchin also serves on the audit committee of BNY Mellon Funds Trust and as Chairman of the PMA finance committee. Prior to serving on the board of trustees of BNY Mellon Funds Trust, he served as a member of the board of directors and on the audit committee of BNY Hamilton Funds, Inc. The Board has determined that Mr. Alchin is an audit committee financial expert.
Experience, Qualifications, Attributes and Skills
Mr. Alchin brings to the Board substantial business and financial experience. His experience as a Co-Chief Financial Officer and Treasurer of Comcast Corporation, a major broadband cable operator and content and programming supplier, provides our Board with valuable insight in the areas of corporate finance and capital formation, financial reporting, investor relations, and treasury functions. Mr. Alchins financial expertise offers our Board a deep understanding of accounting and audit-related matters. In addition, his service as a member of the boards of various financial institutions provides our Board with perspective in the areas of corporate finance and governance matters.
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Frank A. Bennack, Jr.
Age 88
Mr. Bennack has been a director of the Company since January 1998 and served as Lead Independent Director of our Board from Fiscal 2017. In Fiscal 2022, we refreshed the Lead Independent Director role, and following the 2021 Annual Meeting, Mr. Bennack will no longer serve in this role once he is appointed as a Class B director. He is Executive Vice Chairman of The Hearst Corporation (Hearst) and served as Hearsts Chief Executive Officer from 1979 to 2002 and then again from June 2008 to June 2013. Mr. Bennack has been the Chairman of the executive committee and Executive Vice Chairman of the board of directors of Hearst since 2002. He serves on the board and is Chairman Emeritus of Lincoln Center for the Performing Arts, Chairman Emeritus of the New York-Presbyterian Hospital, Chairman of The Paley Center for Media, and a Managing Director of the Metropolitan Opera. He has previously served on the boards of Hearst-Argyle Television, Inc., Wyeth Corporation, and JPMorgan Chase & Co. The Board has determined that Mr. Bennack is an audit committee financial expert.
Experience, Qualifications, Attributes and Skills
Mr. Bennack brings to our Board a distinguished career and extensive business experience as Executive Vice Chairman of Hearst, one of the nations largest private companies engaged in a broad range of publishing, broadcasting, cable networking, and diversified communications activities. His current position as Hearsts Executive Vice Chairman and previous position as Chief Executive Officer gives him critical insights into the operational issues facing a large corporation and provides our Board with valuable experience in the areas of finance, financial reporting, and strategic planning. As a result of his current and past service as a member of the boards of other various public companies and non-profit organizations, he provides our Board with perspective with respect to governance and other important matters that come before our Board. Mr. Bennack has been a member of our Board since 1998, and therefore, his extensive knowledge of our business is a valuable aspect of his service on our Board.
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23 | | | 2021 PROXY STATEMENT |
PROPOSAL 1
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RALPH LAUREN CORPORATION
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Valerie Jarrett
Age 64
Ms. Jarrett was appointed as a director of the Company in October 2020. She is a Senior Distinguished Fellow at the University of Chicago Law School, the president of the Obama Foundation and a senior advisor to ATTN:. She serves as Board Chair of When We All Vote and Co-Chair of The United State of Women. She also serves on the boards of Lyft, Sweetgreen, Ariel Investments, 2U, the Innocence Project, Times Up, the Economic Club of Chicago, the Walgreens Boots Alliance, Sesame Street Workshop and the John F. Kennedy Center for Performing Arts. The Board has determined that Ms. Jarrett is an audit committee financial expert.
Experience, Qualifications, Attributes and Skills
Ms. Jarrett has a background in both the public and private sectors. Ms. Jarrett was the longest serving Senior Advisor to President Barack Obama. She oversaw the Offices of Public Engagement and Intergovernmental Affairs and Chaired the White House Council on Women and Girls. She served as the Chief Executive Officer of The Habitat Company in Chicago, Chairman of the Chicago Transit Board, Commissioner of Planning and Development, and Deputy Chief of Staff for Chicago Mayor Richard M. Daley. She also served as the director of numerous corporate and not-for-profit boards including Chairman and Chief Executive Officer of the Chicago Stock Exchange, Chairman of the University of Chicago Medical Center Board of Trustees, and Director of the Federal Reserve Bank of Chicago. Ms. Jarrett practiced law for ten years in both the private and public sectors, and has also received numerous awards and honorary degrees, including TIMEs 100 Most Influential People as well as the Abner J. Mikva Legal Legends Award.
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Judith A. McHale
Age 74
Ms. McHale has been a director of the Company since November 2011 and also served as a director of the Company from 2001 to 2009. She has served as the President and Chief Executive Officer of Cane Investments, LLC since 2011. Ms. McHale previously served as the Under Secretary of State for Public Diplomacy and Public Affairs for the U.S. Department of State from 2009 to 2011. In 2006, Ms. McHale worked in partnership with the Global Environment Fund, a private equity firm, to launch the GEF/Africa Growth Fund, an investment vehicle intending to focus on supplying expansion capital to small and medium-sized enterprises that provide consumer goods and services in emerging African markets. From June 2004 to December 2006, Ms. McHale served as the President and Chief Executive Officer of Discovery Communications, Inc., the parent company of Discovery Channel, and served as its President and Chief Operating Officer from 1995 to 2004. She currently serves on the boards of Hilton Worldwide Holdings Inc. and ViacomCBS Inc. She has previously served on the boards of directors of Host Hotel & Resorts, Inc., DigitalGlobe Inc., John Hancock Financial Services, Inc., Potomac Electric Power Company, Yellow Pages Group, and SeaWorld Entertainment, Inc.
Experience, Qualifications, Attributes and Skills
Ms. McHale brings to the Board extensive business and management experience. Through her roles as President and Chief Executive Officer and as Chief Operating Officer of Discovery Communications, Inc., Ms. McHale had broad-based responsibilities with respect to financial reporting, marketing, sales, and the creation of product development for a public company which provides the Board with valuable insight into operational and strategic issues facing us. She also possesses public company experience as demonstrated by her current experience on the boards of Hilton Worldwide Holdings Inc. and ViacomCBS Inc. as well as her prior experience on the boards of Host Hotel & Resorts, Inc., DigitalGlobe Inc., John Hancock Financial Services, Inc., Potomac Electric Power Company, Yellow Pages Group, SeaWorld Entertainment, Inc. and Viacom, Inc. In addition, Ms. McHales prior government service provides the Board with unique perspectives on governmental matters, regulatory issues, and processes.
|
2021 PROXY STATEMENT | | | 24 |
PROPOSAL 1
|
RALPH LAUREN CORPORATION
|
Darren Walker
Age 61
Darren Walker has been a director of the Company since July 2020. Mr. Walker has served since 2013 as president of the Ford Foundation (Ford), one of the worlds largest foundations with an endowment of $14 billion. He is also the co-founder and chair of the US Impact Investing Alliance, and serves as a member of the board of directors of PepsiCo, Inc., Square, Inc., Carnegie Hall, National Gallery of Art, Lincoln Center for the Performing Arts, Friends of the High Line, and Friends of Art & Preservation in Embassies. Before joining Ford, Mr. Walker was vice president at the Rockefeller Foundation, overseeing global and domestic programs, and COO of the Abyssinian Development CorporationHarlems largest community development organization. Earlier, he had a decade-long career in finance at UBS and with the law firm Cleary Gottlieb Steen & Hamilton.
Experience, Qualifications, Attributes and Skills
Mr. Walker brings to our Board insight into the role of business in society gained through his role as President of Ford Foundation and leadership in many nonprofit and philanthropic organizations. Through his experience with an international network of diverse social and community initiatives, he provides the Board with a unique perspective on human capital management and talent development and insights on sustainability and public policy matters that are particularly valuable as the Company continues to focus on its sustainability and people and culture goals.
|
25 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 26 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
Our corporate governance practices include:
Board Composition, Policies and Practices
|
Separate Chairman and Chief Executive Officer roles
| |
Appointed Lead Independent Director; Lead Independent Director role to be refreshed following the 2021 Annual Meeting of Stockholders
| ||
75% of Board is independent
| ||
Board refreshment efforts to align with corporate strategy, including addition of three directors in 2018 with CEO experience and strong digital commerce and retail expertise, and the addition of two new diverse directors in Fiscal 2021 with extensive corporate citizenship, sustainability, regulatory governance, government affairs, and finance expertise
| ||
Board Engagement
|
Regular executive sessions of independent directors
| |
Annual Board and Committee self-evaluations and formal evaluation of each Director prior to Annual Meeting
| ||
At least 90% Board and Committee meeting attendance
| ||
Enhanced engagement in strategy, including special meetings to advise on strategic priorities, and increased access to various levels of management across all regions
| ||
Extensive involvement in COVID-19 pandemic risk management, including special meetings on mitigating financial, operational, and human capital risk exposures associated with the global outbreak
| ||
Active engagement with diversity and inclusion initiatives as part of corporate culture oversight
| ||
Board Committees
|
Board Committees are entirely independent
| |
All members of the Audit Committee are financially literate, and four of five members are financial experts
| ||
Committee chairs and composition refreshed in August 2018
| ||
Established 5-year term for Committee chairs
| ||
All independent directors serve on at least one Committee
| ||
Renamed and enhanced Nominating Committee in Fiscal 2020 to oversee corporate citizenship, sustainability, social and environmental issues and impacts
| ||
Stockholder Engagement
|
All directors are elected annually
| |
Stockholder advisory vote on executive compensation held annually
| ||
Longstanding commitment to stockholder outreach is conducted on an ongoing basis, and at least once annually, and actively informs corporate policies and practices
| ||
Board and Committee refreshment, enhanced focus on sustainability, and more robust global citizenship and sustainability disclosure were driven in part by results of stockholder engagement, among other initiatives to oversee corporate citizenship, sustainability, social and environmental issues and impacts
| ||
Participation by Lead Independent Director in stockholder outreach when requested
|
27 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 28 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
29 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
MEETINGS AND DIRECTOR ATTENDANCE
Type of Meeting | Number of Meetings and Director Attendance | |
2020 Annual Meeting of Stockholders | Our directors are expected to attend each Annual Meeting of Stockholders. All directors nominated for election at the 2020 Annual Meeting of Stockholders attended the meeting. | |
Meetings of: | In Fiscal 2021: | |
the Board; the Audit Committee; the Nominating Committee; the Compensation Committee; and the Finance Committee. |
our Board met eight times and conducted two additional executive sessions; | |
our Audit Committee met six times; | ||
our Nominating Committee met four times; | ||
our Compensation Committee met six times; and | ||
our Finance Committee met nine times. | ||
All of the members of our Board attended at least 90% of the required meetings held by the Board and the Committees of the Board on which he or she served. The Board and its Committees also act from time to time by unanimous written consent in lieu of meetings.
| ||
Special Meetings in Response to COVID-19: In response to the COVID-19 outbreak and related impact to our operations, financial condition and the safety and wellbeing of our employees, consumers and partners, the Board, the Finance Committee, and the Compensation Committee convened additional special meetings throughout the fiscal year to provide management with oversight, input, and guidance into crisis management and navigating the evolving impacts of COVID-19 on the Company to ensure that the strength of our global business endures over the long-term.
|
2021 PROXY STATEMENT | | | 30 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
INDEPENDENT COMMITTEES OF THE BOARD OF DIRECTORS
We require all four of our Board Committees to consist solely of independent directors the Audit Committee, the Compensation Committee, the Nominating Committee, and the Finance Committee. The table below indicates the current membership of our Committees prior to any composition changes slated to follow the 2021 Annual Meeting.
Director | Audit Committee |
Compensation Committee |
Nominating Committee |
Finance Committee | ||||
Angela Ahrendts |
|
| ||||||
John R. Alchin |
|
| ||||||
Frank A. Bennack, Jr.1 |
|
|
|
|||||
Joel L. Fleishman2 |
|
|||||||
Michael A. George |
|
|
| |||||
Valerie Jarrett3 |
|
|||||||
Hubert Joly4 |
|
| ||||||
Linda Findley Kozlowski |
|
|
| |||||
Judith A. McHale |
|
| ||||||
Darren Walker |
|
1. | Upon his election as a Class B Director at the 2021 Annual Meeting, Mr. Bennack will no longer serve on the Compensation Committee. |
2. | Mr. Fleishman is not standing for re-election at the 2021 Annual Meeting. |
3. | Upon her appointment at the 2021 Annual Meeting, the Board expects to appoint Ms. Jarrett to the Nominating Committee. |
4. | Upon his appointment as Lead Independent Director following the 2021 Annual Meeting, Mr. Joly will be invited to attend all Committee meetings. |
Chair Member
31 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 32 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
33 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 34 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
35 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 36 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
37 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 38 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
39 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
Board Diversity Matrix
As presented in the chart below, we believe our Board offers a diverse range of key skills and experience to provide effective oversight of the Company and create long-term sustainable growth for our Company through successful execution of the Companys strategic plan. This high-level summary is not intended to be an exhaustive list of each director nominees contributions to the Board.
Balanced Mix of Skills, Qualifications and Experience |
||||||||||||||||||||||||
Attributes/Experiences | CEO1 | International Experience |
Other Public Company |
Retail/ Consumer Products |
Digital | Strategic Planning |
Finance/ Capital Allocation |
Marketing/ Sales |
Legal/ Regulatory Governance |
Citizenship & Sustainability |
Philanthropy | Diversity | ||||||||||||
Angela Ahrendts | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
John Alchin | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
Frank A. Bennack, Jr. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Michael A. George | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
Valerie Jarrett | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
Hubert Joly | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
Linda Findley Kozlowski | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||
David Lauren | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
Ralph Lauren | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
Patrice Louvet | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||
Judith McHale | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
Darren Walker | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
1 Current or former CEO experience, public and private |
2021 PROXY STATEMENT | | | 40 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
41 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 42 |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
43 | | | 2021 PROXY STATEMENT |
CORPORATE GOVERNANCE
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 44 |
SECURITY OWNERSHIP
|
RALPH LAUREN CORPORATION
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of the Record Date by: (i) each of our NEOs, (ii) each director and director nominee, (iii) each stockholder who is known by us to beneficially own in excess of five percent of any class of our voting securities and (iv) all directors and executive officers as a group. Except as otherwise indicated, each stockholder listed below has sole voting and investment power with respect to the shares beneficially owned by such person. The rules of the SEC consider a person to be the beneficial owner of any securities over which the person has or shares voting power or investment power. In addition, a person is deemed to be the beneficial owner of securities if that person has the right to acquire beneficial ownership of such securities within 60 days, including through conversion or exercise of an option or other right. Unless otherwise indicated below, the address of each stockholder is 650 Madison Avenue, New York, New York 10022. As of the Record Date, there were 650 holders of record of our Class A Common Stock.
Class A Common Stock |
Class B Common Stock 1 |
Voting Power of Total Common Stock % |
||||||||||||||||||
Number
|
%
|
Number
|
%
|
%
|
||||||||||||||||
Ralph Lauren |
|
380,4622 |
|
|
* |
|
24,881,2763 |
|
|
100% |
|
|
83.78% |
| ||||||
Patrice Louvet |
|
26,5074 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Jane Nielsen |
|
30,2365 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Andrew Howard Smith |
|
3,3156 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
David Lauren |
|
30,6417 |
|
|
* |
|
8 |
|
|
|
|
* |
| |||||||
Angela Ahrendts |
|
2,5219 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
John R. Alchin |
|
20,63110 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Frank A. Bennack, Jr. |
|
24,39011 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Joel L. Fleishman |
|
11,43412 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Michael A. George |
|
8,10613 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Valerie Jarrett |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Hubert Joly |
|
14,40114 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Linda Findley Kozlowski |
|
2,52115 |
|
|
|
|
|
|
|
|
|
| ||||||||
Judith A. McHale |
|
8,58316 |
|
|
* |
|
|
|
|
|
* |
| ||||||||
Darren Walker
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
The Vanguard Group |
|
4,641,57818 |
|
|
9.5% |
|
|
|
|
|
1.6% |
|||||||||
BlackRock, Inc. |
|
3,917,71319 |
|
|
8.1% |
|
|
|
|
|
1.3% |
|||||||||
JPMorgan Chase & Co. |
|
3,254,79220 |
|
|
6.7% |
|
|
|
|
|
1.1% |
|||||||||
All directors and executive officers as a group (15 persons)
|
|
563,74821
|
|
|
1.16%
|
|
|
24,881,2763
|
|
|
100%
|
|
|
83.84%
|
|
* Less than 1.0%
2021 PROXY STATEMENT | | | 46 |
SECURITY OWNERSHIP
|
RALPH LAUREN CORPORATION
|
47 | | | 2021 PROXY STATEMENT |
DELINQUENT SECTION 16(A)
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 48 |
DIRECTOR COMPENSATION
|
RALPH LAUREN CORPORATION
|
For Fiscal 2021, the compensation for non-employee directors was as follows:
Type of Compensation |
Compensation Amount | |
Annual retainer for each non-employee director1
|
$80,000
| |
Additional annual retainer for Lead Independent Director1
|
$50,000
| |
Additional annual retainer for the Chair of each Board Committee1 |
Chair of the Audit Committee: $30,000 Chair of the Compensation Committee: $30,000 Chair of the Nominating Committee: $20,000 Chair of the Finance Committee: $20,000
| |
Annual retainer for member of each Board Committee1 |
Audit Committee Member: $15,000 Compensation Committee Member: $15,000 Nominating Committee Member: $10,000 Finance Committee Member: $10,000
| |
Annual equity award2
|
Target equity value of $140,000, which is delivered in the form of restricted stock units of Class A Common Stock. These restricted stock units vest on the one year anniversary of the grant.
|
1. | The annual retainers are paid to the non-employee directors in quarterly installments in arrears. |
2. | The annual equity award to non-employee directors is awarded on the date of the Annual Meeting of Stockholders each year to those non-employee directors who join the Board on the date of the Meeting or have served as directors in the preceding fiscal year. |
In response to the COVID-19 global pandemic, our non-employee directors have forgone their quarterly cash compensation for the first quarter of Fiscal 2021.
49 | | | 2021 PROXY STATEMENT |
DIRECTOR COMPENSATION
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 50 |
DIRECTOR COMPENSATION
|
RALPH LAUREN CORPORATION
|
The following table provides information concerning the compensation of those individuals who served as our non-employee directors during Fiscal 2021. Directors who are our employees receive no compensation for their services as directors and do not serve on any committees of the Board. Note that the each of the Directors below who served in the first quarter on Fiscal 2021 agreed to forego their fee for that quarter due to the impact of the COVID-19 crisis.
Name |
Fees Earned or Paid in Cash 1 ($) |
Stock Awards 2 ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation 3 ($) |
Total ($) | |||||||||||
Angela Ahrendts
|
75,000
|
|
140,004
|
|
|
|
|
|
|
215,004
|
| |||||||
John R. Alchin
|
101,250
|
|
140,004
|
|
|
|
|
3,248
|
|
244,502
|
| |||||||
Frank A. Bennack, Jr
|
127,500
|
|
140,004
|
|
|
|
|
3,248
|
|
270,752
|
| |||||||
Dr. Joyce F. Brown4
|
26,250
|
|
|
|
|
|
|
3,248
|
|
29,498
|
| |||||||
Joel L. Fleishman
|
75,000
|
|
140,004
|
|
|
|
|
3,248
|
|
218,252
|
| |||||||
Michael George
|
112,500
|
|
140,004
|
|
|
|
|
|
|
252,504
|
| |||||||
Valerie Jarrett
|
47,500
|
|
|
|
|
|
|
|
|
47,500
|
| |||||||
Hubert Joly
|
93,750
|
|
140,004
|
|
|
|
|
3,248
|
|
237,002
|
| |||||||
Linda Findley Kozlowski
|
90,000
|
|
140,004
|
|
|
|
|
|
|
230,004
|
| |||||||
Judith A. McHale
|
90,000
|
|
140,004
|
|
|
|
|
3,248
|
|
233,252
|
| |||||||
Darren Walker
|
67,500
|
|
140,004
|
|
|
|
|
3,248
|
|
210,752
|
| |||||||
Robert C. Wright4 |
22,500
|
|
|
|
|
|
|
3,248
|
|
25,748
|
|
1. | Reflects the pro-rata amount of fees paid in arrears for Fiscal 2021 per the retainers set forth in the table above based on timing of appointments to the Board or Committees, as applicable. |
2. | We granted annual stock-based awards to non-employee directors on the same day as the annual stockholders meeting in the amount of $140,004, representing the aggregate grant date fair value of the annual grant, made on July 30, 2020, of 1,987 restricted stock units of the Companys Class A Common Stock, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification topic 718. |
3. | This amount represents deferred cash dividends paid during Fiscal 2021 in connection with the vesting of restricted shares of our Class A Common Stock. |
4. | Dr. Brown and Mr. Wright departed the Board of Directors following the 2020 Annual Meeting of Stockholders, but received compensation in connection with their service in the second quarter of Fiscal 2021 from June 28, 2020 to September 26, 2020. |
51 | | | 2021 PROXY STATEMENT |
DIRECTOR COMPENSATION
|
RALPH LAUREN CORPORATION
|
At the end of Fiscal 2021, each individual who served as a non-employee director during Fiscal 2021 held options to purchase shares of our Class A Common Stock, restricted shares, and/or restricted stock units of our Class A Common Stock as follows:
Options 1 | Restricted Stock | Restricted Stock Units | ||||||||||
Angela Ahrendts
|
|
|
|
|
|
|
|
1,987
|
| |||
John R. Alchin
|
|
834
|
|
|
|
|
|
1,987
|
| |||
Frank A. Bennack, Jr.
|
|
834
|
|
|
|
|
|
1,987
|
| |||
Dr. Joyce F. Brown2
|
|
834
|
|
|
|
|
|
|
| |||
Joel L. Fleishman
|
|
834
|
|
|
|
|
|
1,987
|
| |||
Michael George
|
|
|
|
|
|
|
|
1,987
|
| |||
Valerie Jarrett3
|
|
|
|
|
|
|
|
|
| |||
Hubert Joly
|
|
834
|
|
|
|
|
|
1,987
|
| |||
Linda Findley Kozlowski
|
|
|
|
|
|
|
|
1,987
|
| |||
Judith A. McHale
|
|
834
|
|
|
|
|
|
1,987
|
| |||
Darren Walker
|
|
|
|
|
|
|
|
1,987
|
| |||
Robert C. Wright2
|
|
834
|
|
|
|
|
|
|
|
1. | Represents outstanding options granted to non-employee directors in April 2014, which vested ratably over a three-year period on the anniversary date of the grant with a seven year life from date of grant. We have not granted options to non-employee directors since April 1, 2014. |
2. | Dr. Brown and Mr. Wright no longer served on the Board of Directors following the 2020 Annual Meeting of Stockholders. |
3. | Ms. Jarrett joined the Board in October 2020 and will be eligible for the July 29, 2021 grant of restricted stock units. |
2021 PROXY STATEMENT | | | 52 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
COMPENSATION DISCUSSION & ANALYSIS
This Compensation Discussion and Analysis (CD&A) explains our executive compensation programs for the following individuals, all of whom were deemed to be NEOs during Fiscal 2021.
Name | Title | |||
Ralph Lauren |
|
Executive Chairman and Chief Creative Officer | ||
Patrice Louvet |
|
President and Chief Executive Officer (CEO) | ||
Jane Nielsen |
|
Chief Operating Officer and Chief Financial Officer (COO and CFO) | ||
Howard Smith |
|
Chief Commercial Officer | ||
David Lauren |
|
Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation |
The CD&A includes the following:
CD&A Section |
Whats included? | |
Executive Summary |
Highlights of our executive compensation program, including Fiscal 2021 compensation decisions and actions taken in response to the pandemic, how we connect pay with performance and company achievements, and an overview of our executive compensation governance practices | |
Stockholder Feedback and Compensation Committee Response |
Our stockholder engagement process and Compensation Committee consideration of Say on Pay votes, and a preview of our Fiscal 2022 executive compensation program | |
Governance |
Summary of the factors considered by the Compensation Committee in compensation goal setting, the key participants in our executive compensation process and the role each plays in decision-making | |
Key Components of Executive Compensation |
A description of the principal elements of our executive compensation program, including pay mix and specific details regarding decisions made within each element | |
All Other Compensation, Executive Stock Ownership Guidelines, and Related Considerations |
A summary of employee benefits and perquisites, Fiscal 2021 stock ownership guidelines, and other related compensation considerations |
53 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 54 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
55 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 56 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Total Shareholder Return (TSR) Performance
Our TSR for recent periods, relative to our compensation comparator group detailed on page 76 of the CD&A and the S&P 500, is set forth below. TSR is based on stock price appreciation, plus dividends reinvested, with starting and ending share prices based on average closing stock prices for the 20 trading days ending immediately prior to the beginning and end of the performance period. Results are varied with the Company outperforming our compensation comparator group for the three- and five-year periods ended Fiscal 2021 but behind the comparator group in the one-year period and behind the S&P 500 Index for the one-, three-, and five-year periods ended Fiscal 2021.
57 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Compensation Program Philosophy & Objectives
We maintain competitive executive compensation programs designed to attract and retain highly qualified talented employees and reward sustained business growth and results. These programs are intended to drive stockholder value through the following principles:
| Strong pay-for-performance alignment by rewarding progress on our highest priority strategic goals, balancing the needs of our five stakeholder groups: Our Employees, Our Customers and Our Brand, Our Shareholders, Our Partners, and Our Communities |
| Attain competitive compensation practices and levels on total compensation, as well as within each compensation component |
| Strike the right balance of variable and fixed pay by awarding a meaningful portion of compensation in variable rather than fixed pay, with a significant portion in the form of long-term equity awards |
| Maintain globally consistent bonus and stock targets to support movement of talent and internal pay equity |
| Reward and motivate top talent, including high performers and those with high potential |
| Inspire creativity and collaboration (one team, one strategy) |
| Design a simple, consistent, and transparent plan |
2021 PROXY STATEMENT | | | 58 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Overview of Performance-based Compensation Programs for Fiscal 2021
The Fiscal 2021 program design was driven by the following guiding principles established in March 2020 at the onset of the COVID-19 pandemic:
| Flexibility we are in uncharted territory and business as usual plan design will not work |
| Financial Incentives financial incentives will continue to be an important part of executive remuneration and retention |
| Fair and Equitable consider Fiscal 2021 financial impact to all employees |
| Stakeholder Interests design considers each of our 5 stakeholders: |
| Our Employees an engaged and enabled workforce; managing employee health and wellbeing; clear and consistent resources and communication, |
| Our Customers and our Brand Brand integrity and consumer perception of our Brand; stay true in our purpose to re-establish the dream of a better life, |
| Our Shareholders preserving the long-term health of the Company and defining the plan to restart cash returns to shareholders, |
| Our Partners protecting our strategic and key partners, and |
| Our Communities Social and Sustainability achievements |
| Simple keep program simple to focus on what matters most |
59 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 60 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
The awards and pandemic-related compensation decisions are summarized below.
LTI Award |
Original Performance Measure | Fiscal Years | Compensation Decision | |||
Fiscal 2019 PSUs-ROIC1 |
Cumulative three-year Return on Invested Capital (ROIC) | 2019 2021 | Replace Fiscal 2021 ROIC goal with three-year relative TSR goal. Payout capped at 100% target. | |||
Fiscal 2019 PSUs-TSR1 |
Three-year relative TSR to comparator group of companies | 2019 2021 | No change | |||
Fiscal 2020 PSUs-ROIC1 |
Cumulative three-year ROIC | 2020 2022 | Replace Fiscal 2021 and 2022 ROIC goals with three-year relative TSR goal. Payout capped at 100% target. | |||
Fiscal 2020 PSUs-TSR1 |
Three-year relative TSR to comparator group of companies | 2020 2022 | No change | |||
Fiscal 2020 PSUs-EPS2 |
Cumulative three-year Earnings per Share (EPS) | 2020 2022 | Replace Fiscal 2021 and 2022 EPS goals with three-year relative TSR goal. Payout capped at 100% target. |
1 | Represents 50% of annual equity award for Mr. R. Lauren and 25% of annual equity award for the other NEOs for each respective fiscal year. |
2 | These shares were part of a special one-time award for Ms. Nielsen and Mr. Smith in conjunction with their respective promotions in fiscal 2020 and per the terms of their respective employment agreements. |
61 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Overview of Executive Compensation Governance Practices
We seek to maintain high standards with respect to the governance of our executive compensation programs. Key features of our compensation policies and practices that aim to drive performance and align with stockholder interests are highlighted below.
Our Compensation Practices (What we do)
| ||||||
|
At-Risk Compensation: Our incentive-based compensation represents a significant portion of our executives compensation (90% or more for both our Executive Chairman and Chief Creative Officer and our President and CEO).
|
|
Annual Review: We conduct an annual review of our executive compensation program to ensure it rewards executives for performance against clear metrics that align with our Strategic Plan and stockholder interests, retains top talent, and discourages unnecessary risk taking by our executives.
| |||
|
Stock Ownership Guidelines: We require our NEOs and other select members of our senior management to own a meaningful amount of our Common Stock, worth one to six times their base salary, depending on their positions.
|
|
Regular Review of Programs with Top Institutional Investors: We annually review our compensation programs with our top institutional investors for their feedback and consideration.
| |||
|
Double Trigger Vesting: We provide for double-trigger vesting following a change-in-control for equity awards for all participants in our long-term incentive plan.
|
|
Regular Review of Share Utilization: We regularly evaluate share utilization levels and review the dilutive impact of stock compensation.
| |||
|
Clawback Policy: Our NEOs are subject to a robust recoupment policy in the event the Company is required to restate its financial statements, providing the right to recoup granted, earned, and vested awards with a look-back period.
|
|
Independent Consultant: We work with an independent compensation consultant retained by the Compensation Committee.
| |||
|
Fixed Share Authorization: Our long-term incentive plan does not provide for an evergreen feature that would automatically replenish the shares for issuance.
|
|
Independent Compensation Committee: Our Compensation Committee is composed solely of independent directors
| |||
|
Caps on Incentive Payouts: We have caps on maximum payouts under our short-term and long-term incentive plans.
|
|
||||
Our Prohibited Compensation Practices (What we dont do)
| ||||||
|
No Guaranteed Increases: We do not guarantee salary increases or annual incentives for our NEOs.
|
|
No Repricing Without Stockholder Approval: We do not reprice or exchange for cash underwater stock options without stockholder approval.
| |||
|
No Hedging or Pledging: We prohibit the hedging or pledging of the Companys stock by directors, officers, or other employees of the Company.
|
|
No Discount Grants: We do not provide for grants of any equity below fair market value.
| |||
|
No Excise Tax Gross ups: We do not provide any tax gross ups under our long-term incentive plan.
|
|
2021 PROXY STATEMENT | | | 62 |
COMPENSATION DISCUSSION AND ANALYSIS
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RALPH LAUREN CORPORATION
|
63 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Looking Forward to Fiscal 2022
The Compensation Committee, in conjunction with its third-party independent compensation consultant, reviewed and approved changes to the design of the Fiscal 2022 compensation programs, to align with our strategy to return to sustainable revenue and earnings growth as we emerge from the pandemic. Based on feedback from our stockholders we received in Fiscal 2021, the Compensation Committee determined that we will utilize financial measures in our performance-based compensation programs and we will also include ESG metrics as summarized below.
The Fiscal 2022 financial metrics for our short-term incentive plan will include corporate revenue and corporate operating profit margin. We will introduce ESG metrics as the strategic goal modifier. The metrics will be tied to the Company making progress on key goals, including climate, water and diversity.
The performance measures in the Fiscal 2022 Fiscal 2024 PSUs will be three-year cumulative operating profit margin and threeyear relative TSR. These metrics support alignment with the long-term interests of our stockholders.
The relative TSR comparator group includes retail peers, certain department stores, and other well branded companies. Except for the removal of TJX Companies, Inc., the comparator group for Fiscal 2022 contains the same companies as used in Fiscal 2019 and 2020 with four new additional companies that operate in our industry Levi Strauss, Lululemon, Abercrombie & Fitch and G-III Apparel.
The comparator group for relative TSR is shown below.
Abercrombie & Fitch |
L Brands, Inc. | Nordstrom, Inc. | Urban Outfitters, Inc. | |||
Capri Holdings Limited |
Levi Strauss | PVH Corp. | V.F. Corporation | |||
Dillards, Inc. |
Lululemon | RH (Restoration Hardware, Inc.) | Williams-Sonoma, Inc. | |||
The Gap, Inc. |
Macys Inc. | Tapestry, Inc. | ||||
G-III Apparel |
Nike, Inc. | Under Armour, Inc. |
2021 PROXY STATEMENT | | | 64 |
COMPENSATION DISCUSSION AND ANALYSIS
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RALPH LAUREN CORPORATION
|
65 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
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RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 66 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Factors in Determining Compensation for Executives
Determining Compensation for Mr. R. Lauren, our Executive Chairman and Chief Creative Officer. In response to the global pandemic, the Compensation Committee and Mr. R. Lauren mutually agreed that Mr. R. Lauren would forgo his Fiscal 2020 bonus which would have been $6,000,000 and his entire Fiscal 2021 base salary pursuant to an amendment to his employment agreement. The Compensation Committee, in consultation with its third-party independent compensation consultant and independent outside counsel, determined the compensation structure under Mr. R. Laurens employment agreement, effective as of the beginning of Fiscal 2018. Mr. R. Lauren serves as both Chief Creative Officer and Executive Chairman. These factors were considered when setting Mr. R. Laurens compensation opportunity during Fiscal 2021 and the terms set forth in his employment agreement. Mr. R Laurens role is unique and critical, and his compensation package is based on several factors including:
Chief Creative Officer |
Executive Chairman |
|||||
As the chief designer, Mr. R. Laurens compensation package is also based on the Companys review of the compensation of other Chief Creative Officers. The Compensation Committee believes that Mr. R. Laurens leadership, aesthetic vision, direction and the publics association of his name and likeness with our branded products are unparalleled and integral components of our success, and that his contributions to our longstanding, consistent achievement over five decades have been, and continue to be, instrumental in creating long-term stockholder value.
|
As Executive Chairman of the Board, Mr. R. Lauren works with the CEO to set overall vision, strategy, financial objectives, and investment priorities for the business. Mr. R. Lauren also continues to mentor our design team and provide guidance in areas that are important to the Company, including growth in new business categories, creative talent, advertising, and marketing. |
|||||
Strategic Vision
Mr. R. Lauren not only drives the vision and strategy of a unique, complex, global organization with distribution channels in multiple product categories and countries, but he is also the founder, creator and name behind our brands for over 53 years and the value of the impact of his leadership to the creative talent of the organization is very significant.
|
||||||
Celebrated Achievements
Mr. R. Laurens unique, critical role as Chief Creative Officer brings to us his extraordinary and rare talent that is unrivaled by others in our industry. His career has resulted in numerous tributes for his contributions to the fashion industry, including the Council of Fashion Designers of Americas four highest honors: Lifetime Achievement Award; Womenswear Designer of the Year Award; Menswear Designer of the Year Award; and Retailer of the Year Award.
|
67 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
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RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 68 |
COMPENSATION DISCUSSION AND ANALYSIS
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RALPH LAUREN CORPORATION
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KEY COMPONENTS OF EXECUTIVE COMPENSATION
The principal elements of our senior executive compensation programs are summarized in the following table and described in more detail below.
Compensation Element | Performance-Based | Fiscal 2021 Objective | ||
Base Salary | Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled employees.
| |||
Annual Cash Incentive Awards |
R |
Motivate and reward employees for progress on KPIs based on the Companys three COVID-19 phases: managing the crisis, preparing for the rebound, and working in the new normal, all in the context of our five stakeholders.
| ||
Long-Term Equity-Based Incentive Awards |
R |
Align employees interest with that of our stockholders and encourage executive decision-making that maximizes value creation over the long-term with variable equity compensation earned based on retention of key talent.
|
69 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Compensation Programs Pay Mix
The charts below show the components and allocation of the variable and fixed elements that comprise the target total direct compensation for our NEOs. Total direct annual compensation represents base salary plus target bonus and target annual equity. This chart does not reflect salary reductions taken during Fiscal 2021 further discussed under Executive Summary Compensation Decisions in Fiscal 2021 Base Salary.
2021 PROXY STATEMENT | | | 70 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Compensation Element: Base Salary
We pay base salaries to attract and retain talented executives and to provide a fixed base of cash compensation. Base salaries for each of our NEOs are determined and approved by the Compensation Committee. In general, base salaries may be reviewed periodically by the Compensation Committee and are provided in each NEOs employment agreement, other than for Mr. D. Lauren, who does not have an employment agreement.
As of the end of Fiscal 2021, the annual base salaries for our NEOs were as follows:
Name / Title |
Fiscal 2020 Base Salary ($) |
Fiscal 2021 Base Salary ($) |
% Increase | ||||||||||||
Ralph Lauren Executive Chairman and Chief Creative Officer
|
|
1,750,000 |
|
0 |
|
NA |
1 | ||||||||
Patrice Louvet CEO
|
|
1,250,000 |
|
1,250,000 |
|
0 |
%2 | ||||||||
Jane Nielsen COO and CFO
|
|
1,050,000 |
|
1,050,000 |
|
0 |
%3 | ||||||||
Howard Smith Chief Commercial Officer
|
|
1,050,000 |
|
1,050,000 |
|
0 |
%3 | ||||||||
David Lauren Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation |
|
850,000 |
|
850,000 |
|
|
0 |
%3 |
1. | Mr. R. Lauren did not receive a base salary in Fiscal 2021. |
2. | Mr. Louvets base salary was reduced by 50% in the first quarter of Fiscal 2021. |
3. | Ms. Nielsen, Mr. Smith and Mr. D. Laurens respective base salaries were reduced by 20% in the first quarter of Fiscal 2021. |
Compensation Element: Short-Term Annual Cash Incentive Awards
In Fiscal 2021, all our NEOs participated in the Executive Officer Annual Incentive Plan (EOAIP), a stockholder-approved, short-term cash incentive bonus plan, in which the Compensation Committee determines the eligible EOAIP participants from among our executive officers. The EOAIP is designed to promote strong executive decision-making and achievement that supports the realization of significant overall Company financial goals. Key features of the EOAIP are as follows:
Payouts | Payouts are based on different levels of achievement, which include threshold, target, stretch and maximum levels, established by the Compensation Committee each year.
| |||
In Fiscal 2021, the Compensation Committee determined that the following performance levels were applicable to EOAIP participants:
| ||||
Threshold |
The minimum level of performance that is required before the bonus plan pays out at 50% of the target level.
| |||
Target
|
Target level of achievement of KPI goals as determined by the Compensation Committee.
| |||
Maximum |
Achievement at a superior level of performance. For fiscal 2021 only, maximum payout was reduced from 200% to 125% of target bonus set for all NEOs, except for Mr. Louvet, whose maximum payout was reduced from 150% to 125% of target bonus.
|
71 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Compensation Committee Process and Authority |
Process: Each year, we engage in an extensive and deliberate process to establish our performance measures and performance targets which are subject to Compensation Committee approval in consultation with its independent consultant. For Fiscal 2021 only, as a result of the pandemic, these measures were in the form of KPIs, with both qualitative and quantitative goals as further described above under Annual Cash Incentive Awards Fiscal 2021. At the end of the fiscal year, the following approval process takes place:
Based upon the degree of achievement, the Compensation Committee approves the annual cash incentive bonuses payable to each NEO under the EOAIP, as applicable;
The Compensation Committee believes that the performance of each of our NEOs is represented by the Companys performance results and individual performance is not considered in determining their bonuses.
Authority: The Compensation Committee has the authority to:
Determine the eligible EOAIP participants from among our executive officers;
Establish the performance goals at the beginning of the fiscal year. For Fiscal 2021 only, performance goals were in the form of KPIs established in May 2020 for the first half of the fiscal year and November 2020 for the second half of the fiscal year;
Establish the required achievement levels against pre-determined performance goals under the EOAIP; and
Exercise discretion to reduce or eliminate, but not increase, the bonus amounts payable under the EOAIP.
Modifications to previously granted PSUs:
Due to the acute severity of the COVID-19 impact to the business in Fiscal 2021, the Compensation Committee held regular and special meetings during Fiscal 2021 to discuss and review the impact of adjusting the performance measures of the Companys outstanding long-term equity awards granted in Fiscal 2019 and Fiscal 2020 prior to COVID-19. These Performance Share Unit (PSUs) awards included performance measures for Fiscal 2021 and Fiscal 2022 set prior to the pandemic. The Committee, in conjunction with its outside compensation consultant, reviewed each award.
In consultation with its third-party independent compensation consultant, the Committee exercised its authority to approve modifications to certain of these awards in March 2021. Details of modification are further described above under Executive Summary - Impact of COVID-19 on Our Fiscal 2021 Performance. |
2021 PROXY STATEMENT | | | 72 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
Progress made against KPIs set in the context of our 5 stakeholders are noted in the chart below and was determined by the Compensation Committee to be slightly above target for each of the two performance intervals. The Compensation Committee limited bonus payouts to target level and, as a result, approved bonus payout at 100% of target for Fiscal 2021.
Stakeholders |
First Half of Fiscal 2021 Progress in the following areas |
Second Half of Fiscal 2021 Progress in the following areas | ||
Our Employees
An engaged and enabled workforce; managing employee health and wellbeing; clear and consistent resources and communication |
COVID-19 related policies and protocols
Employee Pulse survey scores
Black Advisory Council workstreams
Unconscious bias training |
Salary and Benefits reduction savings
Employee survey favorability rate
Deployment of unconscious bias training
Visibility of underrepresented talent and robust action plans | ||
Our Customers and our Brand
Brand integrity and consumer perception of our Brand; stay true in our purpose to re-establish the dream of a better life |
Five brand equity score
Brand consideration and purchase intent
New RLE customers
North America connected retail focus and capabilities |
Five brand equity score
Brand consideration and purchase intent
New RLE customers
Brand elevation; Average Unit Retail | ||
Our Shareholders
Preserving the long-term health of the Company and defining the plan to restart cash returns to shareholders |
Liquidity position
Average Unit Retail (AUR) growth
Reduced Selling, General and Administrative (SG&A) expenses |
On track to restart dividend payment
On track to Gross Margin growth
Chaps license agreement
Global RL.com revenue growth
International customers size; Targeted wholesale doors; Off-price penetration | ||
Our Partners
Protecting our strategic and key partners |
Share of our business in strategic and key suppliers
Process of cancellation and suspension of Fall orders with open and transparent communication
Financing program for our suppliers to help them manage their cash flow and address long-term gaps on worker wages and benefits
Responsible Purchasing Practices Policy |
Share of business in strategic & key suppliers
Suppliers integration to the interactive supplier portal (VMS) through Digitizing the Value Chain program | ||
Our Communities
Social and Sustainability achievements |
Setting science-based targets
Tier 1 supplier facilities completion of Sustainable Coalitions Higg Facility Environmental Module assessment
Wage management strategy
Black African American (BAA) Manifesto |
Sustainability:
Climate: Science-based GHG target
Waste: Diversion rate for distribution centers
Materials: Sustainably sourced cotton
Citizenship: Suppliers with baseline wage levels established. Womens empowerment programs
D&I: Supplier D&I workstream | ||
Overall Assessment |
Slightly above Target | Slightly above Target |
73 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
The table below sets forth the target bonus and actual Fiscal 2021 cash bonus for each of our NEOs:
Payout was capped at 100% of target for the NEOs based on discussions with the Compensation Committee.
Name / Title | Target Bonus ($) | Actual Fiscal 2021 Bonus ($) | ||||||
Ralph Lauren1 Executive Chairman and Chief Creative Officer |
|
6,000,000 |
|
|
6,000,000 |
| ||
Patrice Louvet1 CEO |
|
3,750,000 |
|
|
3,750,000 |
| ||
Jane Nielsen1 COO and CFO |
|
1,837,500 |
|
|
1,837,500 |
| ||
Howard Smith1 Chief Commercial Officer |
|
1,575,000 |
|
|
1,575,000 |
| ||
David Lauren1 Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation |
|
637,500 |
|
|
637,500 |
|
1. | Target bonus amounts payable to Messrs. R. Lauren, Louvet, and Smith and Ms. Nielsen are set forth in their respective employment agreements. Target bonus amount payable to Mr. D. Lauren, who does not have an employment agreement, is based on his role in the organization and was approved by the Compensation Committee. |
2021 PROXY STATEMENT | | | 74 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
The Fiscal 2021 awards consisted of:
Fiscal 2021 Awards Granted |
Vesting | |
Restricted Stock Units Prorata |
3 year pro-rata vesting on anniversary date of grant | |
Restricted Stock Units Cliff |
3 year cliff vesting on third anniversary of grant date |
In Fiscal 2021, each of our NEOs received long-term equity awards consisting of RSUs-Cliff and/or RSUs-Prorata granted on August 15, 2021.
Name / Title |
RSUs-Cliff | RSUs-Prorata | ||||||
Ralph Lauren Executive Chairman and Chief Creative Officer
|
157,910 | | ||||||
Patrice Louvet CEO
|
53,833 | 53,832 | ||||||
Jane Nielsen COO and CFO
|
21,533 | 21,534 | ||||||
Howard Smith Chief Commercial Officer
|
19,739 | 19,740 | ||||||
David Lauren Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation
|
3,948 | 3,948 |
The performance and payout levels for the Fiscal 2019 PSUs-Relative TSR, applicable to all NEOs, for the performance period Fiscal 2019 Fiscal 2021 are summarized as follows:
Performance Level |
Relative TSR Performance | % of PSUs Vested | ||
Below Threshold |
Below 30th Percentile |
0% | ||
Threshold |
30th Percentile |
50% | ||
Target |
50th Percentile |
100% | ||
Stretch |
70th Percentile |
150% | ||
Maximum |
90th Percentile and above |
200% | ||
Performance Results and Amount |
53.33rd Percentile |
108.33% |
No payout is earned for performance below threshold. The number of PSUs earned is interpolated on a linear basis for performance between Threshold and Target, between Target and Stretch, and between Stretch and Maximum.
75 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
The comparator group which was used for Relative TSR is shown below. The companies in the comparator group include luxury retail peers, certain department stores and apparel wholesalers, and other well branded companies.
Capri Holdings Limited |
Macys, Inc. |
RH (Restoration Hardware, Inc.) |
Urban Outfitters, Inc. | |||
Dillards, Inc. |
Nike, Inc. |
Tapestry, Inc. |
V.F. Corporation | |||
The Gap, Inc. |
Nordstrom, Inc. |
The TJX Companies, Inc. |
Williams-Sonoma, Inc. | |||
L Brands, Inc. |
PVH Corp. |
Under Armour, Inc. |
Fiscal 2019 PSUs-ROIC (modified award):
Achievement Level-Cumulative ROIC |
% Performance Target |
Fiscal 2019 2020 Cumulative ROIC Goals |
Percent of Target Award Earned | |||
Threshold |
90% | 51.0% | 50% | |||
Target |
100% | 56.7% | 100% | |||
Maximum |
110% | 62.4% | 200% | |||
Achievement |
106% | 60.1% | 159% |
|
Performance Measure | Performance Period | Performance Results | Percent of Target Award Earned |
Amount Paid as a % of Target | |||||
PSUs ROIC (applicable to all NEOs) |
Cumulative ROIC | Fiscal 2019Fiscal 2020 | 106%1 | 159%2 | 100%4 for all NEOs | |||||
|
3-year Relative TSR | Fiscal 2019Fiscal 2021 | 53.33rd Percentile | 108.33%3 |
|
1. | As a % of Target |
2. | Award based on achievement of cumulative two-year ROIC goal shown in the chart above. |
3. | Award based on achievement of TSR relative to comparator companies listed under Fiscal 2019 PSUs-Relative TSR and shown in the charts above. |
4. | Although achievement was above target for both the cumulative two-year ROIC and three-year relative TSR goals, payout was capped at 100% target. |
2021 PROXY STATEMENT | | | 76 |
COMPENSATION DISCUSSION AND ANALYSIS
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RALPH LAUREN CORPORATION
|
77 | | | 2021 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
All of our NEOs exceeded their respective Fiscal 2021 stock ownership guidelines. As of the end of Fiscal 2021, the following stock ownership targets were in effect for our NEOs:
Name
|
Share Ownership Target Value
| |
Ralph Lauren, Executive Chairman and Chief Creative Officer
|
6 times base salary
| |
Patrice Louvet, CEO
|
6 times base salary
| |
Jane Nielsen, COO and CFO
|
3 times base salary
| |
Howard Smith, Chief Commercial Officer
|
3 times base salary
| |
David Lauren, Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation
|
3 times base salary
|
2021 PROXY STATEMENT | | | 78 |
COMPENSATION DISCUSSION AND ANALYSIS
|
RALPH LAUREN CORPORATION
|
79 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
EXECUTIVE COMPENSATION MATTERS
The following table sets forth a summary of all compensation awarded or paid to or earned by our NEOs for Fiscal 2021, Fiscal 2020, and Fiscal 2019.
Name and Principal Position |
Fiscal Year |
Salary1 ($) |
Bonus2 ($) |
Stock Awards3 ($) |
Option ($) |
Non-Equity Incentive Plan Compensation5 ($) |
Change
in ($) |
All
Other ($) |
Total ($) |
|||||||||||||||||||||||||||
Ralph Lauren Executive Chairman and Chief Creative Officer |
|
2021 |
|
|
|
|
|
|
|
11,000,011 |
|
|
|
|
|
6,000,000 |
|
|
|
|
|
131,234 |
|
|
17,131,245 |
| ||||||||||
|
2020 |
|
1,750,000 |
|
|
|
|
10,999,955 |
|
|
|
|
|
|
|
|
|
|
291,319 |
|
13,041,274 |
|||||||||||||||
|
2019 |
|
1,750,000 |
|
|
|
|
10,999,993 |
|
|
|
|
|
9,180,000 |
|
|
|
|
|
289,532 |
|
|
22,219,525 |
| ||||||||||||
Patrice Louvet President and CEO |
|
2021 |
|
1,117,788 |
|
|
|
|
7,131,351 |
|
|
|
|
|
3,750,000 |
|
|
|
|
64,429 |
|
12,063,568 |
||||||||||||||
|
2020 |
|
1,250,000 |
|
|
|
|
7,089,951 |
|
|
|
|
|
3,750,000 |
|
|
|
|
|
80,519 |
|
|
12,170,470 |
| ||||||||||||
|
2019 |
|
1,250,000 |
|
|
|
|
7,266,200 |
|
|
|
|
5,197,500 |
|
|
|
|
137,984 |
|
13,851,684 |
||||||||||||||||
Jane Nielsen COO and CFO |
|
2021 |
|
1,005,577 |
|
|
|
|
2,852,609 |
|
|
|
|
|
1,837,500 |
|
|
|
|
|
25,338 |
|
|
5,721,024 |
| |||||||||||
|
2020 |
|
1,050,000 |
|
|
|
|
7,062,447 |
|
|
|
|
|
1,837,500 |
|
|
|
|
25,523 |
|
9,975,470 |
|||||||||||||||
|
2019 |
|
990,000 |
|
|
|
|
2,421,966 |
|
|
|
|
|
2,499,255 |
|
|
|
|
|
26,694 |
|
|
5,937,915 |
| ||||||||||||
Howard Smith Chief Commercial Officer |
|
2021 |
|
1,005,577 |
|
|
|
|
2,614,952 |
|
|
|
|
|
1,575,000 |
|
|
|
|
4,437,331 |
|
|
9,632,860 |
|||||||||||||
|
2020 |
|
1,050,000 |
|
|
|
|
3,991,369 |
|
|
|
|
1,575,000 |
|
|
|
|
1,494,390 |
|
|
8,110,759 |
| ||||||||||||||
David Lauren Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation |
|
2021
|
|
|
814,038 |
|
|
|
|
523,003 |
|
|
|
|
637,500 |
|
|
|
|
25,569 |
|
|
2,000,110 |
| ||||||||||||
|
2020
|
|
|
850,000 |
|
|
|
|
519,828 |
|
|
|
|
637,500 |
|
|
|
|
23,885 |
|
2,031,213 |
| ||||||||||||||
|
2019
|
|
|
850,000 |
|
|
|
|
532,997 |
|
|
|
|
1,072,913 |
|
|
|
|
27,231 |
|
|
2,483,141 |
|
1. | The amounts reported in this column represent base salaries paid to each of the NEOs for the applicable fiscal year as provided for in each of their respective employment agreements or compensation arrangements. See Executive Employment Agreements and Compensatory Arrangements. As discussed in the CD&A, under Executive Summary Compensation Decisions in Fiscal 2021- Base Salary, the amounts in Fiscal 2021 reflect temporary salary reductions instituted during the fiscal year as a result of COVID-19. |
2. | The NEOs did not receive any discretionary bonuses, sign-on bonuses, or other annual bonus payments that are not contingent on the achievement of stipulated performance goals. Cash bonus payments that are contingent on achieving pre-established, substantially uncertain and communicated goals, including payments under the EOAIP, appear in the column headed, Non-Equity Incentive Plan Compensation. |
3. | The stock-based compensation amounts shown in this column reflect the aggregate grant date fair value, assuming no risk of forfeiture, of RSU, PSU, and PRSU awards granted during Fiscal 2021, Fiscal 2020 and Fiscal 2019, calculated in accordance with Accounting Standards Codification topic 718, Stock Compensation (ASC 718). The assumptions used in calculating these amounts is set forth in Note 18 to our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for Fiscal 2021. We determine the fair value of RSU, PSU, PSU-ROIC, PSU-EPS, and PRSU awards using the average of the high and low stock prices on the date of grant, as adjusted to reflect the absence of dividends for those awards that are not entitled to dividend equivalents. We determine the fair value of PSU-Relative TSR award using a Monte Carlo simulation, which models multiple stock price paths of the Companys Class A common stock and that of its comparator group to evaluate and determine its ultimate expected relative TSR performance ranking. For all PSUs, the amounts shown in the table reflect the aggregate grant date fair value at the Target achievement level. Performance metrics of certain PSUs granted in Fiscal 2020 and Fiscal 2019 were changed during Fiscal 2021 as discussed in the CD&A, under Executive Summary Impact of COVID-19 on Our Fiscal 2021 Performance. The related payout ranges were lowered for these PSUs, with no resulting incremental compensation cost for accounting purposes under ASC 718 as a result of these changes. |
2021 PROXY STATEMENT | | | 80 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
RSUs can only be paid out at Target. PRSUs can be paid at a range of zero to Target. No PSUs were granted in Fiscal 2021. If Performance were assumed to be achieved at the Maximum level for PSUs, the aggregate grant date fair value would increase by the following amounts: |
Fiscal 2020 | Fiscal 2019 | |||||||||||||||||||
|
PSUs-ROIC* | PSUs-Relative TSR |
PSUs-EPS* | PSUs-ROIC* | PSUs-Relative TSR |
|||||||||||||||
Ralph Lauren |
$ | 0 | $ | 5,499,965 | N/A | $ | 0 | $ | 5,500,018 | |||||||||||
Patrice Louvet |
$ | 0 | $ | 1,874,962 | N/A | $ | 0 | $ | 1,874,913 | |||||||||||
Jane Nielsen |
$ | 0 | $ | 750,037 | $ | 0 | $ | 0 | $ | 624,913 | ||||||||||
Howard Smith |
$ | 0 | $ | 687,512 | $ | 0 | N/A | N/A | ||||||||||||
David Lauren |
$ | 0 | $ | 137,468 | N/A | $ | 0 | $ | 137,498 |
* Represents a modified PSU award where payout is capped at Target.
4. | No stock options were granted in Fiscal 2021, Fiscal 2020, or Fiscal 2019. |
5. | The amounts reported in this column represent payments made under the EOAIP in June following the expiration of the fiscal year to which the payments relate. |
6. | The named executive officers did not receive any above-market or preferential earnings on compensation deferred on a basis that is not tax qualified. See Non-Qualified Deferred Compensation table. |
7. | The amounts reported in this column represent the aggregate dollar amount for each NEO of all other compensation for the year, including perquisites and other personal benefits. Under SEC rules, we are required to identify by type all perquisites and other personal benefits for a NEO if the total value for that individual equals or exceeds $10,000, and to report and quantify each perquisite or personal benefit that exceeds the greater of $25,000 or 10% of the total amount for that individual. |
In Fiscal 2021, Mr. R. Lauren received perquisites and other personal benefits including reimbursement for personal travel ($128,893) and enhanced amount of business travel accident coverage. |
In Fiscal 2021, Mr. Louvet received perquisites and other personal benefits including car service for travel to and from his home to the office ($24,013), financial planning services ($27,000) and matching contribution under the Companys 401(k) plan. |
In Fiscal 2021, Ms. Nielsen and Mr. D. Lauren received perquisites and other personal benefits, including an automobile allowance and matching contributions under the Companys 401(k) plan. |
In Fiscal 2021, Mr. Smith received perquisites and other personal benefits, including an automobile allowance and matching contributions under the Companys 401(k) plan in addition to international assignment benefits ($4,411,993) which include allowances for goods and services, and housing, and tax equalization payments under our Expatriate Program described further in the Compensation Discussion and Analysis, under All Other Compensation: Ralph Lauren Expatriate Program. The tax equalization payments may differ significantly from year to year due to differences in timing of payments and tax reporting years in various countries. |
81 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
The following table sets forth all plan-based awards granted to the NEOs in Fiscal 2021. No PSUs were granted in Fiscal 2021. Performance metrics of certain PSUs granted in Fiscal 2020 and Fiscal 2019 were changed during Fiscal 2021 as discussed in the CD&A, under Executive Summary - Impact of COVID-19 on Our Fiscal 2021 Performance. The related payout ranges were lowered for these PSUs with no incremental compensation cost as a result of these changes.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
Ralph Lauren |
|
3,000,000 |
|
6,000,000 |
|
7,500,000 |
|
|||||||||||||||||||||||||||||||||||||||||||||
|
08/15/2020 |
2 |
|
|
|
|
|
|
|
|
|
|
157,910 |
|
|
11,000,011 |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||
Patrice Louvet |
|
1,875,000 |
|
3,750,000 |
|
4,687,500 |
|
|||||||||||||||||||||||||||||||||||||||||||||
|
08/15/2020 |
2 |
|
|
|
|
|
|
|
|
|
|
53,833 |
|
|
3,492,131 |
| |||||||||||||||||||||||||||||||||||
|
08/15/2020 |
3 |
|
|
|
|
|
|
|
|
|
|
53,832 |
|
|
3,639,221 |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||
Jane Nielsen |
|
918,750 |
|
1,837,500 |
|
2,296,875 |
|
|||||||||||||||||||||||||||||||||||||||||||||
|
08/15/2020 |
2 |
|
|
|
|
|
|
|
|
|
|
21,533 |
|
1,396,839 |
| ||||||||||||||||||||||||||||||||||||
|
08/15/2020 |
3 |
|
|
|
|
|
|
|
|
|
|
21,534 |
|
|
1,455,769 |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||
Howard Smith |
|
787,500 |
|
1,575,000 |
|
1,968,750 |
|
|||||||||||||||||||||||||||||||||||||||||||||
|
08/15/2020 |
2 |
|
|
|
|
|
|
|
|
|
|
19,739 |
|
|
1,280,463 |
| |||||||||||||||||||||||||||||||||||
|
08/15/2020 |
3 |
|
|
|
|
|
|
|
|
|
|
19,740 |
|
|
1,334,489 |
| |||||||||||||||||||||||||||||||||||
David Lauren |
|
318,750 |
|
637,500 |
|
796,875 |
|
|||||||||||||||||||||||||||||||||||||||||||||
|
08/15/2020 |
2 |
|
|
|
|
|
|
|
|
|
|
3,948 |
|
|
256,106 |
| |||||||||||||||||||||||||||||||||||
|
08/15/2020 |
3 |
|
|
|
|
|
|
|
|
|
|
3,948 |
|
|
266,898 |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. | Represents grants of cash incentive awards under the Corporations EOAIP. See Compensation Discussion and Analysis Key Components of Executive Compensation Compensation Element: Short-Term Annual Cash Incentive Awards for a description of the material terms of these awards. |
2. | Represents the number of RSUs that were granted in Fiscal 2021 under our 2019 Stock Incentive Plan with three-year cliff vesting on the third anniversary date of the grant. |
3. | Represents the number of RSUs that were granted in Fiscal 2021 under our 2019 Stock Incentive Plan with three-year annual pro-rata vesting on the anniversary date of the grant. |
2021 PROXY STATEMENT | | | 82 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
83 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 84 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
85 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information concerning the unexercised stock options outstanding and unvested stock awards for each of our NEOs as of the end of Fiscal 2021.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options # Exercisable1 |
Number of Securities Underlying Unexercised Options # Unexercisable2 |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested14 ($) |
Equity Have Not |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested14 ($) |
|||||||||||||||||||||||||||
Ralph Lauren |
||||||||||||||||||||||||||||||||||||
79,629 | 0 | 0 | $ | 159.680 | 07/14/2021 | |||||||||||||||||||||||||||||||
42,787 | 3 | $ | 5,226,860 | |||||||||||||||||||||||||||||||||
34,087 | 4 | $ | 4,164,068 | |||||||||||||||||||||||||||||||||
32,721 | 13 | $ | 3,997,197 | |||||||||||||||||||||||||||||||||
29,763 | 14 | $ | 3,635,848 | |||||||||||||||||||||||||||||||||
157,910 | 5 | $ | 19,290,286 | |||||||||||||||||||||||||||||||||
Patrice Louvet |
N/A | |||||||||||||||||||||||||||||||||||
34,913 | 6 | $ | 4,264,972 | |||||||||||||||||||||||||||||||||
13,963 | 3 | $ | 1,705,720 | |||||||||||||||||||||||||||||||||
11,684 | 4 | $ | 1,427,317 | |||||||||||||||||||||||||||||||||
9,309 | 7 | $ | 1,137,187 | |||||||||||||||||||||||||||||||||
10,916 | 13 | $ | 1,333,499 | |||||||||||||||||||||||||||||||||
10,796 | 14 | $ | 1,318,839 | |||||||||||||||||||||||||||||||||
29,108 | 8 | $ | 3,555,833 | |||||||||||||||||||||||||||||||||
53,833 | 5 | $ | 6,576,239 | |||||||||||||||||||||||||||||||||
53,832 | 9 | $ | 6,576,117 | |||||||||||||||||||||||||||||||||
Jane Nielsen |
N/A | |||||||||||||||||||||||||||||||||||
4,654 | 3 | $ | 568,533 | |||||||||||||||||||||||||||||||||
3,894 | 4 | $ | 475,691 | |||||||||||||||||||||||||||||||||
3,103 | 7 | $ | 379,062 | |||||||||||||||||||||||||||||||||
23,127 | 10 | $ | 2,825,194 | |||||||||||||||||||||||||||||||||
6,813 | 15 | $ | 832,276 | |||||||||||||||||||||||||||||||||
4,367 | 13 | $ | 533,473 | |||||||||||||||||||||||||||||||||
4,319 | 14 | $ | 527,609 | |||||||||||||||||||||||||||||||||
11,644 | 8 | $ | 1,422,431 | |||||||||||||||||||||||||||||||||
21,533 | 5 | $ | 2,630,471 | |||||||||||||||||||||||||||||||||
21,534 | 9 | $ | 2,630,593 | |||||||||||||||||||||||||||||||||
Howard Smith |
||||||||||||||||||||||||||||||||||||
3,315 | 0 | 0 | $ | 159.680 | 07/14/2021 | |||||||||||||||||||||||||||||||
2,482 | 11 | $ | 303,201 | |||||||||||||||||||||||||||||||||
18,597 | 12 | $ | 2,271,810 | |||||||||||||||||||||||||||||||||
3,724 | 3 | $ | 454,924 | |||||||||||||||||||||||||||||||||
3,116 | 4 | $ | 380,651 | |||||||||||||||||||||||||||||||||
6,813 | 15 | $ | 832,276 | |||||||||||||||||||||||||||||||||
4,003 | 13 | $ | 489,006 | |||||||||||||||||||||||||||||||||
3,959 | 14 | $ | 483,631 | |||||||||||||||||||||||||||||||||
10,674 | 8 | $ | 1,303,936 | |||||||||||||||||||||||||||||||||
19,739 | 5 | $ | 2,411,316 | |||||||||||||||||||||||||||||||||
19,740 | 9 | $ | 2,411,438 |
2021 PROXY STATEMENT | | | 86 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options # Exercisable1 |
Number of Securities Underlying Unexercised Options # Unexercisable2 |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested14 ($) |
Equity Have Not |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested14 ($) |
|||||||||||||||||||||||||||
David Lauren |
||||||||||||||||||||||||||||||||||||
4,566 | 0 | 0 | $ | 159.680 | 07/14/2021 | |||||||||||||||||||||||||||||||
1,024 | 3 | $ | 125,092 | |||||||||||||||||||||||||||||||||
857 | 4 | $ | 104,691 | |||||||||||||||||||||||||||||||||
683 | 7 | $ | 83,435 | |||||||||||||||||||||||||||||||||
801 | 13 | $ | 97,850 | |||||||||||||||||||||||||||||||||
792 | 14 | $ | 96,751 | |||||||||||||||||||||||||||||||||
2,134 | 8 | $ | 260,689 | |||||||||||||||||||||||||||||||||
3,948 | 5 | $ | 482,288 | |||||||||||||||||||||||||||||||||
3,948 | 9 | $ | 482,288 |
1. | This column represents the number of shares of Class A Common Stock underlying exercisable options that have not been exercised at March 27, 2021. |
2. | This column represents the number of shares of Class A Common Stock underlying unexercisable options at March 27, 2021. These options vest and become exercisable ratably in three equal annual installments beginning one year after the grant date. |
3. | Amount reflects Fiscal 2019 PSUs-ROIC for which the applicable performance goal was achieved as of March 27, 2021. Fiscal 2019 PSUs-ROIC are included at 100% of target reflecting actual performance achieved. These shares vested and were paid out on May 24, 2021. |
4. | Amount reflects Fiscal 2019 PSUs-TSR for which the applicable performance goal was achieved as of March 27, 2021. Fiscal 2019 PSUs-TSR are included at 108.33% of target reflecting actual performance achieved. These shares vested and were paid out on May 24, 2021. |
5. | Amount reflects the number of shares of Class A common stock represented by unvested RSUs subject to time-based vesting. RSUs from this award were granted on August 15, 2020 and vest 100% on August 15, 2023. |
6. | Amount reflects the number of shares of Class A common stock represented by unvested RSUs subject to time-based vesting. Mr. Louvets RSUs were granted on July 3, 2017 vest 100% on July 3, 2022. |
7. | Amount reflects the Fiscal 2019 PRSUs for which the applicable performance goal was achieved at the end of Fiscal 2019. The final tranche of the Fiscal 2019 PRSUs vested and were paid out on May 24, 2021. |
8. | Amount reflects the Fiscal 2020 PRSUs for which the applicable performance goal was achieved at the end of Fiscal 2020. The second tranche of the Fiscal 2020 PRSUs vested and were paid out on May 24, 2021. The final tranche of Fiscal 2020 PRSUs will vest after the end of Fiscal 2022, subject to continued service at that time with regard to each eligible recipient thereof. |
9. | Amount reflects the number of shares of Class A common stock represented by unvested RSUs subject to time-based vesting. RSUs from this award were granted on August 15, 2020 and vest in three equal annual installments on the anniversary date of the grant. |
10. | Amount reflects the number of shares of Class A common stock represented by unvested RSUs subject to time-based vesting. Ms. Nielsens RSUs were granted on March 31, 2019. RSUs from this award vest in three equal annual installments with the first installment vesting on the two-year anniversary of the grant date. The first tranche vested on March 31, 2021. |
11. | Amount reflects the number of shares of Class A common stock represented by unvested RSUs subject to time-based vesting. Mr. Smiths RSUs were granted on August 15, 2018. The final tranche vests on August 15, 2021. |
12. | Amount reflects the number of shares of Class A common stock represented by unvested RSUs subject to time-based vesting. Mr. Smiths RSUs were granted on March 25, 2019. The RSUs from this award vests in four equal annual installments with the first installment vesting on the two-year anniversary of the grant date. The first tranche vested on March 25, 2021. |
13. | Amount reflects unearned Fiscal 2020 PSUs-ROIC which in accordance with SEC rules are included at threshold performance. See Executive Employment Agreements and Other Compensatory Arrangements and Compensation Discussion and Analysis Executive Summary-Impact of COVID-19 on Our Fiscal 2021 Performance for a description of the material terms of these PSUs. Where applicable, shares have been rounded to whole numbers. |
14. | Amount reflects unearned Fiscal 2020 PSUs-TSR which in accordance with SEC rules are included at threshold performance. See Executive Employment Agreements and Other Compensatory Arrangements and Compensation Discussion and Analysis Executive Summary-Impact of COVID-19 on Our Fiscal 2021 Performance for a description of the material terms of these PSUs. Where applicable, shares have been rounded to whole numbers. |
15. | Amount reflects unearned Fiscal 2020 PSUs-EPS grants to Ms. Nielsen and Mr. Smith, which in accordance with SEC rules are included at threshold performance. See Executive Employment Agreements and Other Compensatory Arrangements and Compensation Discussion and Analysis Executive Summary-Impact of COVID-19 on Our Fiscal 2021 Performance for a description of the material terms of these PSUs. Where applicable, shares have been rounded to whole numbers. |
87 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
OPTION EXERCISES AND STOCK VESTED
The following table provides information concerning the exercises of stock options and vesting of stock awards during Fiscal 2021 on an aggregated basis for each of our NEOs.
Option Awards
|
|
Stock Awards
|
||||||||||||||||
Name
|
Number of
|
Value Realized
|
Number of
|
Value Realized
|
||||||||||||||
Ralph Lauren1
|
|
0
|
|
$
|
0
|
|
226,199 | $ | 17,288,902 | |||||||||
Patrice Louvet2
|
|
0
|
|
$
|
0
|
|
|
236,270
|
|
$
|
18,041,627
|
| ||||||
Jane Nielsen3
|
|
0
|
|
$
|
0
|
|
|
38,179
|
|
$
|
2,915,406
|
| ||||||
Howard Smith4
|
|
0
|
|
$
|
0
|
|
|
40,696
|
|
$
|
3,264,261
|
| ||||||
David Lauren5
|
|
0
|
|
$
|
0
|
|
|
8,187
|
|
$
|
625,177
|
|
1. | In connection with the vesting of his performance-based stock awards, Mr. R. Lauren acquired 222,182 shares on June 1, 2020 with a market price of $76.36 and the table includes a cash payment of $60.59 in lieu of fractional shares representing .793 shares of Class A Common Stock. Market price is based upon the average of the high and the low stock prices on that day. |
Mr. R. Lauren has outstanding vested RSUs whose underlying shares of Class A Common Stock will not be delivered until Mr. R. Laurens separation from the Company or, if earlier, upon a change in control. These RSUs are eligible to receive dividend equivalents in the form of additional fully vested RSUs each time we pay an actual cash dividend on our outstanding shares. Additional RSUs of 4,016.96 were acquired on April 10, 2020. Market price (based on the average of the high and low sale price on that day) was $80.415.
2. | Mr. Louvet acquired 236,270 shares upon vesting of his performance-based stock awards on June 1, 2020 with a market price of $76.36 and the table includes a cash payment of $49.64 in lieu of fractional shares representing .65 shares of Class A Common Stock. |
3. | In connection with the vesting of her performance-based stock awards, Ms. Nielsen acquired 38,179 shares on June 1, 2020 with a market price of |
$76.36 and the table includes a cash payment of $57.27 in lieu of fractional shares representing .75 shares of Class A Common Stock.
4. | Mr. Smith acquired 4,340 shares upon vesting of his RSUs, with a market price of $65.205 on May 15, 2020; 2,482 shares upon vesting of his RSUs, with a market price of $69.66 on August 15, 2020; 3,515 shares upon vesting of his RSUs, with a market price of $71.26 on September 25, 2020; and 6,199 shares upon vesting of his RSUs, with a market price of $115.015 on March 25, 2021. In connection with the vesting of his performance- based stock awards, Mr. Smith acquired 24,160 shares on June 1, 2020 with a market price of $76.36 and the table includes a cash payment of |
$61.09 in lieu of fractional shares representing .80 shares of Class A Common Stock.
5. | In connection with the vesting of his performance-based stock awards, Mr. D. Lauren acquired 8,187 shares on June 1, 2020 with a market price of $76.36 and the table includes a cash payment of $17.56 in lieu of fractional shares representing .23 shares of Class A Common Stock. |
NON-QUALIFIED DEFERRED COMPENSATION
The following table provides information with respect to our defined contribution and non-tax-qualified compensation deferral plans for each of our NEOs.
Name |
Executive |
Registrant Contributions in Last FY ($) |
Aggregate Earnings in Last FY ($) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Last FYE ($) |
|||||||||||||||
Ralph Lauren
|
|
|
|
|
323,024
|
1
|
|
24,293,904
|
2
|
|
|
|
|
56,968,670
|
3
| |||||
Patrice Louvet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Jane Nielsen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
David Lauren
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Valérie Hermann |
| | | | | |||||||||||||||
1. | Represents the value of Mr. R. Laurens additional RSUs that are granted each time we pay an actual cash dividend on our outstanding shares. Additional RSUs of 4,016.96 were acquired on April 10, 2020 with a market price based on the average of the high and low stock prices on each day. |
2. | The amount reflected for Mr. R. Lauren represents appreciation/depreciation accumulated on vested but not delivered RSUs. Appreciation/ depreciation accumulated on vested but not delivered RSUs is not included in the Summary Compensation Table as the RSUs do not receive any above-market or preferential earnings. |
3. | Mr. R. Laurens RSUs are valued at $120.22, the average of the high and the low stock prices as of March 26, 2021, the last business day of Fiscal 2021 on which there were sales of shares. Of the total amount shown in this column, $23,223,863 has been reported in the Summary Compensation Table of prior years proxy statements. Mr. R. Laurens RSUs have vested but may not be distributed to him until his employment is terminated. |
2021 PROXY STATEMENT | | | 88 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
89 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 90 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
91 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 92 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
93 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 94 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
95 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
Executive Chairman and Chief Creative Officer - Ralph Lauren |
| |||||||||||||||||||
Cash Severance - Base Salary1 |
Cash Severance - Bonus |
Vesting of Equity Awards2 |
Continuation of Other Benefits & Perquisites3 |
Total | ||||||||||||||||
By the Company for Cause/by the Executive Without Good Reason |
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
| |||||
By the Company Without Cause/by the Executive for Good Reason |
$ | 3,500,000 | $ |
18,740,440 |
4 |
$ |
43,627,346 |
5 |
$ | 1,040,470 | $ | 66,908,256 |
1. | In the event of a termination by the Company without cause or by Mr. R. Lauren for good reason and pursuant to his employment agreement, we would provide a lump sum cash payment equal to two times his base salary without regard to his reduced base salary rate in Fiscal 2021, payable within 30 days following the date of termination. |
2. | Represents the value associated with the acceleration or continuation (as the case may be) of the vesting of equity awards. In the case of RSUs and PSUs (including associated dividend equivalent units on such award), the value was based on the NYSE closing price of Class A Common Stock on March 26, 2021, which was $122.16. |
3. | Represents the cost of providing welfare and medical benefits, office facilities and secretarial assistance, and the use of a car and driver through the applicable severance period. |
4. | Represents two times the average annual bonus paid to Mr. R. Lauren for the two fiscal years immediately preceding the year of termination excluding the Fiscal 2020 and Fiscal 2021 bonus per Amendment No. 1 to the Amended and Restated Employment Agreement dated June 17, 2020. |
5. | If maximum performance for PSUs is reached, the value would increase by $11,115,724. |
6. | In the event of a qualifying termination in connection with a change in control, no special change in control severance payment is payable to Mr. R. Lauren. If Mr. R. Laurens employment were to be terminated by us without cause or if he terminates his employment for good reason following a change in control, Mr. R. Lauren would be entitled to the same amounts reflected above for By the Company without Cause/By the Executive for Good Reason. |
2021 PROXY STATEMENT | | | 96 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
President and Chief Executive Officer - Patrice Louvet |
| |||||||||||||||||||
Cash Severance - Base Salary1 |
Cash Severance - Bonus |
Vesting of Equity Awards2 |
Continuation of Other Benefits & Perquisites3 |
Total | ||||||||||||||||
By the Company for Cause/by the Executive Without Good Reason |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
By the Company Without Cause/by the Executive for Good Reason |
$ | 10,000,000 | $ | 0 | $ | 4,264,972 | $ | 42,797 | $ | 14,307,769 | ||||||||||
Death or Disability |
$ | 0 | $ | 0 | $ | 21,670,003 | 4 | $ | 0 | $ | 21,670,003 | |||||||||
Change in Control with Termination |
$ | 10,000,000 | $ | 0 | $ | 30,438,241 | $ | 42,797 | $ | 40,481,038 |
1. | In the event of a termination by the Company without cause or by Mr. Louvet for good reason and pursuant to his employment agreement, we would provide a monthly cash payment equal to four times his monthly base salary for two years. In the event of a qualifying termination in connection with a change in control, we would provide a lump sum cash payment equal to four times his base salary for two years. |
2. | Represents the value associated with the acceleration or continuation (as the case may be) of the vesting of equity awards. In the case of RSUs, PSUs, and PRSUs, the value was based on the NYSE closing price of Class A Common Stock on March 26, 2021, which was $122.16. |
3. | Represents the cost of providing medical and dental benefits during applicable severance period. |
4. | If maximum performance for PSUs is reached, the value would increase by $3,955,174. |
Chief Operating Officer and Chief Financial Officer - Jane Nielsen |
| |||||||||||||||||||
Cash Severance - Base Salary1 |
Cash Severance - Bonus |
Vesting of Equity Awards2 |
Continuation of Other Benefits & Perquisites3 |
Total | ||||||||||||||||
By the Company for Cause/by the Executive Without Good Reason |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
By the Company Without Cause/by the Executive for Good Reason |
$ | 1,575,000 | $ | 1,837,500 | 4 | $ |
14,681,922 |
5 |
$ | 33,065 | $ | 18,127,487 | ||||||||
Death or Disability |
$ | 0 | $ | 0 | $ | 14,681,922 | 5 | $ | 0 | $ | 14,681,922 | |||||||||
Change in Control
with |
$ | 2,100,000 | $ |
3,675,000 |
6 |
$ | 14,681,922 | $ | 33,065 | $ | 20,489,987 |
1. | In the event of a termination by the Company without cause or by Ms. Nielsen for good reason and pursuant to her employment agreement, we would continue to pay Ms. Nielsen for the longer of (a) the balance of her employment agreement (up to a maximum of two years) or (b) one year. In the event of a qualifying termination in connection with a change in control Ms. Nielsen would be entitled to a lump sum payment equal to two times her base salary. |
2. | Represents the value associated with the acceleration or continuation (as the case may be) of the vesting of equity awards. In the case of RSUs, PSUs and PRSUs, the value was based on the NYSE closing price of Class A Common Stock on March 26, 2021, which was $122.16. |
3. | Represents the cost of providing medical and dental benefits during applicable severance period. |
4. | Represents 175% of base salary. |
5. | If maximum performance for applicable PSUs is reached, the value would increase by $1,494,261. |
6. | Represents two times the target bonus in effect immediately prior to termination. |
97 | | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
Chief Commercial Officer - Howard Smith |
| |||||||||||||||||||
Cash Severance - Base Salary1 |
Cash Severance - Bonus |
Vesting of Equity Awards2 |
Continuation of Other Benefits & Perquisites3 |
Total | ||||||||||||||||
By the Company for Cause/by the Executive Without Good Reason |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
By the Company Without Cause/by the Executive for Good Reason |
$ | 1,575,000 | $ | 1,575,000 | 4 | $ | 0 | $ | 23,527 | $ | 3,173,527 | |||||||||
Death or Disability |
$ | 0 | $ | 0 | $ | 9,902,412 | 5 | $ | 0 | $ | 9,902,412 | |||||||||
Change in Control with Termination |
$ | 2,100,000 | $ | 3,150,000 | 6 | $ | 13,117,541 | $ | 23,527 | $ | 18,391,068 |
1. | In the event of a termination by the Company without cause or by Mr. Smith for good reason and pursuant to his employment agreement, we would continue to pay Mr. Smith his base salary for eighteen months. In the event of a qualifying termination in connection with a change in control, we would provide for a lump sum payment equal to two times his base salary. |
2. | Represents the value associated with the acceleration or continuation (as the case may be) of the vesting of equity awards. In the case of RSUs, PSUs and PRSUs, the value was based on the NYSE closing price of Class A Common Stock on March 26, 2021, which was $122.16. |
3. | Represents the cost of providing medical and dental benefits during applicable severance period. |
4. | Represents 150% of base salary payable at the end of the severance period. |
5. | If maximum performance for applicable PSUs is reached, the value would increase by $1,318,473. |
6. | Represents two times the bonus paid for the fiscal year prior to termination. |
Chief Branding and Innovation Officer, Vice Chairman of the Board, Strategic Advisor to the CEO and President of the Ralph Lauren Corporate Foundation - David Lauren |
| |||||||||||||||||||
Cash Severance - Base Salary |
Cash Severance - Bonus |
Vesting of Equity Awards2 |
Continuation of Other Benefits & Perquisites |
Total | ||||||||||||||||
By the Company for Just Cause/by the Executive |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
By the Company Without Just Cause1 |
$ | 850,000 | $ | 0 | $ | 0 | $ | 0 | $ | 850,000 | ||||||||||
Death or Disability |
$ | 0 | $ | 0 | $ | 1,276,328 | 3 | $ | 0 | $ | 1,276,328 | |||||||||
Change in Control with Termination |
$ | 850,000 | $ | 0 | $ | 1,919,378 | $ | 0 | $ | 2,769,378 |
1. | In the event of a termination by the Company without just cause, we would continue to pay Mr. D. Lauren his base salary for one year. |
2. | Represents the value associated with the acceleration or continuation (as the case may be) of the vesting of equity awards. In the case of RSUs, PSUs and PRSUs the value was based on the NYSE closing price of Class A Common Stock on March 26, 2021, which was $122.16. |
3. | If maximum performance for applicable PSUs is reached, the value would increase by $290,008. |
2021 PROXY STATEMENT | | | 98 |
EXECUTIVE COMPENSATION MATTERS
|
RALPH LAUREN CORPORATION
|
99 | | | 2021 PROXY STATEMENT |
CERTAIN RELATIONSHIPS AND TRANSACTIONS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 100 |
CERTAIN RELATIONSHIPS AND TRANSACTIONS
|
RALPH LAUREN CORPORATION
|
101 | | | 2021 PROXY STATEMENT |
PROPOSAL 2
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 102 |
PROPOSAL 2
|
RALPH LAUREN CORPORATION
|
103 | | | 2021 PROXY STATEMENT |
PROPOSAL 3
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 104 |
QUESTIONS AND ANSWERS
|
RALPH LAUREN CORPORATION
|
105 | | | 2021 PROXY STATEMENT |
QUESTIONS AND ANSWERS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 106 |
QUESTIONS AND ANSWERS
|
RALPH LAUREN CORPORATION
|
107 | | | 2021 PROXY STATEMENT |
QUESTIONS AND ANSWERS
|
RALPH LAUREN CORPORATION
|
Proposal Number |
Proposal | Board Recommendation |
Affirmative Vote Required for Approval |
Broker Discretionary Voting Allowed | ||||||
1 |
Election of Directors: | FOR ALL | Plurality vote | No | ||||||
Three directors (the Class A Directors) will be elected by a plurality vote of the shares of Class A Common Stock present in person or by proxy at the 2021 Annual Meeting and eligible to vote. |
||||||||||
|
Nine directors (the Class B Directors) will be elected by a plurality vote of the shares of Class B Common Stock present in person or by proxy at the 2021 Annual Meeting and eligible to vote. |
|
|
|
| |||||
2 |
Ratification of the appointment of Ernst & Young as our independent registered public accounting firm for Fiscal 2022. |
|
FOR | Majority of votes cast | Yes | |||||
3 |
Approval, on an advisory basis, of the compensation of our named executive officers and our compensation philosophy, policies and practices. |
|
FOR | Majority of votes cast | No |
2021 PROXY STATEMENT | | | 108 |
ADDITIONAL MATTERS
|
RALPH LAUREN CORPORATION
|
109 | | | 2021 PROXY STATEMENT |
ADDITIONAL MATTERS
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 110 |
APPENDIX A
|
RALPH LAUREN CORPORATION
|
111 | | | 2021 PROXY STATEMENT |
APPENDIX A
|
RALPH LAUREN CORPORATION
|
2021 PROXY STATEMENT | | | 112 |
APPENDIX B
|
RALPH LAUREN CORPORATION
|
RECONCILIATION OF CERTAIN NON-U.S. GAAP FINANCIAL MEASURES*
The following tables reconcile certain financial measures disclosed within this Proxy Statement for the fiscal periods presented, including the Companys return on invested capital (ROIC) as approved by the Companys Compensation Committee.
|
Operating Expenses | |||||||||||
|
Fiscal Years Ended | |||||||||||
|
March 27, 2021 |
|
March 28, 2020 | |||||||||
(millions) | ||||||||||||
As Reported (GAAP basis) |
$ | (2,905.0 | ) |
|
|
|
$ | (3,336.3 | ) | |||
Restructuring and other charges |
170.5 |
|
|
|
67.2 | |||||||
Impairment of assets |
96.0 |
|
|
|
31.6 | |||||||
COVID-19-related bad debt expense (benefit) |
(41.4 | ) |
|
|
|
56.4 | ||||||
As Adjusted (Non-GAAP basis)(a) |
$ | (2,679.9 | ) |
|
|
|
$ | (3,181.1 | ) |
(a) | Fiscal 2021 and Fiscal 2020 adjusted balances as previously disclosed in the Companys press releases filed as Exhibit 99.1 to the Forms 8-K filed on May 20, 2021 and May 27, 2020, respectively. |
|
Fiscal Year Ended |
|
Fiscal 20192020 Cumulative ROIC %(b) |
|||||||||||||||||||||||||||||||||||||||||
|
March 28, 2020 |
|
March 30, 2019 |
|
||||||||||||||||||||||||||||||||||||||||
|
Net Income |
Inventories | P&E(a) | ROIC%(b) |
|
Net Income |
Inventories | P&E(a) | ROIC%(b) |
|
||||||||||||||||||||||||||||||||||
(millions) | (millions) | |||||||||||||||||||||||||||||||||||||||||||
As Reported (GAAP basis) |
$ | 384.3 | $ | 736.2 | $ | 979.5 |
|
|
|
|
|
|
$ | 430.9 | $ | 817.8 | $ | 1,039.2 |
|
|
|
|
|
|
|
|
| |||||||||||||||||
Restructuring and other charges(c) |
67.2 | | |
|
|
|
|
|
|
130.1 | | 11.6 |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Impairment of assets |
38.7 | | 16.8 |
|
|
|
|
|
|
25.8 | | 25.8 |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Non-routine inventory charges |
159.5 | 144.5 | |
|
|
|
|
|
|
7.2 | 7.2 | |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
COVID-19 bad debt expense |
56.4 | | |
|
|
|
|
|
|
| | |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Income tax provision |
(199.9 | ) | | |
|
|
|
|
|
|
(6.5 | ) | | |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
As Adjusted (Non-GAAP basis for press release)(d) |
506.2 |
|
|
|
|
|
|
|
|
|
|
|
|
587.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Other operational charges, net of tax(e) |
41.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
As Adjusted (Non-GAAP basis) |
$ | 548.1 | $ | 880.7 | $ | 996.3 | 29.2 | % |
|
|
|
$ | 587.5 | $ | 825.0 | $ | 1,076.6 | 30.9 | % |
|
|
|
60.1% |
* | Defined terms used herein are consistent with those used in the accompanying Proxy Statement. |
113 | | | 2021 PROXY STATEMENT |
APPENDIX B
|
RALPH LAUREN CORPORATION
|
(a) | P&E = Property & Equipment, Net |
(b) | ROIC% is calculated as Net Income divided by (Inventories + Property & Equipment, Net) |
(c) | Restructuring and other charges for Fiscal 2019 includes a loss on sale of property of $11.6 million related to the sale of one of the Companys distribution centers in North America. |
(d) | Fiscal 2020 and Fiscal 2019 adjusted balances as previously disclosed in the Companys press releases filed as Exhibit 99.1 to the Forms 8-K filed on May 27, 2020 and May 14, 2019, respectively. |
(e) | Other operational charges, net of tax, for Fiscal 2020 represents partial relief related to COVID-19 and Hong Kong protest business disruptions as approved by the Compensation Committee for purposes of the Fiscal 2019 PSU-ROIC award. |
This Proxy Statement includes certain non-U.S. GAAP financial measures relating to the impact of charges and other items as described herein. Adjustments made during Fiscal 2021 included bad debt expense adjustments related to COVID-19 business disruptions, restructuring-related charges, impairment of assets, and certain other charges primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired. Adjustments made during Fiscal 2020 included inventory-related charges and bad debt expense related to COVID-19 business disruptions, restructuring-related charges, impairment of assets, and certain other charges primarily related to the charitable donation of the net cash proceeds received from the sale of the Companys corporate jet, and rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements had not yet expired. Additionally, the Fiscal 2020 income tax (provision) benefit reflects a one-time benefit recorded in connection with Swiss tax reform. Adjustments made during Fiscal 2019 include restructuring-related charges, impairment of assets, and certain other charges primarily related to the Companys new sabbatical leave program, depreciation expense associated with the Companys former Polo store at 711 Fifth Avenue in New York City, and a customs audit. Additionally, the Fiscal 2019 income tax (provision) benefit was adjusted for the impact of U.S. tax reform enactment-related charges. Refer to the Companys Fiscal 2021, Fiscal 2020, and Fiscal 2019 Forms 10-K for additional discussion regarding these charges. The Compensation Committee also approved adjustments for certain other operational charges during Fiscal 2020, providing partial relief for COVID-19 and Hong Kong protest business disruptions.
Included in this Appendix B is a reconciliation between the non-U.S. GAAP financial measures and the most directly comparable U.S. GAAP measures before and after these charges. The related tax effects were calculated using the respective statutory tax rates for each applicable jurisdiction. The Company uses non-U.S. GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. In addition, the Compensation Committee uses non-U.S. GAAP measures to set and certify the achievement of certain performance-based compensation goals. The Company believes that excluding items that are not comparable from period to period helps investors and others compare operating performance between two periods. While the Company considers the non-U.S. GAAP measures useful in analyzing its results, they are not intended to replace, nor act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP and may be different from non-U.S. GAAP measures reported by other companies.
2021 PROXY STATEMENT | | | 114 |
RALPH LAUREN CORPORATION 650 MADISON AVENUE NEW YORK, NY 10022 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/RL2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D55062-P57888 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY RALPH LAUREN CORPORATION For All Except Withhold All For All To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR ALL of the following: 1. Election of three (3) Class A Directors Nominees as Class A Directors: 01) Michael A. George 02) Hubert Joly 03) Linda Findley Kozlowski The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. Ratification of appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 2, 2022. 3. Approval, on an advisory basis, of the compensation of our named executive officers and our compensation philosophy, policies and practices as described in the accompanying Proxy Statement. Please mark, date and sign exactly as your name appears hereon and return in the enclosed envelope. If acting as executor, administrator, trustee, guardian, etc., you should so indicate when signing. If the signer is a corporation, please write in the full corporate name and sign by a duly authorized officer. If shares are held jointly, each stockholder named should sign. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D55063-P57888 RALPH LAUREN CORPORATION CLASS A COMMON STOCK PROXY ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned, revoking all previous proxies, hereby constitutes and appoints Jane Nielsen and Avery S. Fischer, and each of them, proxies with full power of substitution to vote for the undersigned all shares of Class A Common Stock of Ralph Lauren Corporation (the Company) that the undersigned would be entitled to vote at the 2021 Annual Meeting of Stockholders to be held via live webcast at www.virtualshareholdermeeting.com/RL2021 on July 29, 2021 at 9:30 a.m. (local time), and at any adjournment or postponement thereof, upon the matters described in the accompanying Proxy Statement and, in such proxies discretion, upon any other business that may properly come before the meeting or any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSAL TO ELECT THE NOMINEES FOR ELECTION AS DIRECTORS; FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM; AND FOR THE PROPOSAL, ON AN ADVISORY BASIS, APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AND OUR COMPENSATION PHILOSOPHY, POLICIES AND PRACTICES AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. This proxy is continued on the reverse side. Please sign on the reverse side and return promptly. (Continued and to be marked, dated and signed, on the other side)
RALPH LAUREN CORPORATION 650 MADISON AVENUE NEW YORK, NY 10022 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/RL2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D55064-P57888 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY RALPH LAUREN CORPORATION For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR ALL of the following: 1. Election of nine (9) Class B Directors Nominees as Class B Directors: 01) Ralph Lauren 06) Frank A. Bennack, Jr. 02) Patrice Louvet 07) Valerie Jarrett 03) David Lauren 08) Judith A. McHale 04) Angela Ahrendts 09) Darren Walker 05) John R. Alchin The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. Ratification of appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 2, 2022. 3. Approval, on an advisory basis, of the compensation of our named executive officers and our compensation philosophy, policies and practices as described in the accompanying Proxy Statement. Please mark, date and sign exactly as your name appears hereon and return in the enclosed envelope. If acting as executor, administrator, trustee, guardian, etc., you should so indicate when signing. If the signer is a corporation, please write in the full corporate name and sign by a duly authorized officer. If shares are held jointly, each stockholder named should sign. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D55065-P57888 RALPH LAUREN CORPORATION CLASS B COMMON STOCK PROXY ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned, revoking all previous proxies, hereby constitutes and appoints Jane Nielsen and Avery S. Fischer, and each of them, proxies with full power of substitution to vote for the undersigned all shares of Class B Common Stock of Ralph Lauren Corporation (the Company) that the undersigned would be entitled to vote at the 2021 Annual Meeting of Stockholders to be held via live webcast at www.virtualshareholdermeeting.com/RL2021 on July 29, 2021 at 9:30 a.m. (local time), and at any adjournment or postponement thereof, upon the matters described in the accompanying Proxy Statement and, in such proxies discretion, upon any other business that may properly come before the meeting or any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSAL TO ELECT THE NOMINEES FOR ELECTION AS DIRECTORS; FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM; AND FOR THE PROPOSAL, ON AN ADVISORY BASIS, APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AND OUR COMPENSATION PHILOSOPHY, POLICIES AND PRACTICES AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. This proxy is continued on the reverse side. Please sign on the reverse side and return promptly. (Continued and to be marked, dated and signed, on the other side)