Richard Zannino

About Richard F. Zannino

Richard F. Zannino, age 66, has served on The Estée Lauder Companies Inc. board since 2010 and is currently the Lead Independent Director and Chair of the Audit Committee. He is a Managing Director at CCMP Capital Advisors, LLC, co-heading its consumer retail practice, and is recognized by the board as an “Audit Committee Financial Expert.” His background spans CEO, CFO, and COO roles in media and consumer/retail, underpinning deep financial and operating expertise .

Past Roles

External Roles

Board Governance

• Independence and leadership: The board determined Zannino is “independent” under NYSE rules. He was elected Lead Independent Director effective November 8, 2024 and re-appointed for a one-year term following the 2025 Annual Meeting, presiding over executive sessions of independent and non-management directors .
• Committee roles: Audit Committee Chair; Audit responsibilities include oversight of independent auditors, financial statements, risk assessment/management, related person transactions policy, IT/cybersecurity, taxes, treasury, and legal matters. Zannino and Paul Fribourg are designated “Audit Committee Financial Experts” .
• Attendance: In fiscal 2025, the Board, Audit, and Compensation Committees each met seven times; Nominating & ESG met five times. Total combined attendance exceeded 97%; no director attended less than 75%. There were six executive sessions of non-employee directors and one executive session of the independent directors .
• Audit Committee Report: The Audit Committee (Chair: Zannino) reviewed the FY2025 audited financials, required PCAOB/SEC communications, and auditor independence, and recommended inclusion of the audited financials in the FY2025 Form 10-K .

Fixed Compensation

Policy framework (annual, for non-employee directors; payable quarterly; deferrable):

• Board retainer: $100,000; Audit member: $12,000; Compensation member: $8,000; Nominating & ESG member: $8,000; Audit Chair: +$25,000; Lead Independent Director: +$30,000; Chair of the Board (not applicable to Zannino): +$225,000 .
• Directors may defer cash retainers into stock units or an interest-bearing account, paid after board service ends .

FY2025 actual compensation (as reported):

Notes: The cash amount reflects board/committee roles, including partial-year service as Lead Independent Director beginning November 8, 2024, consistent with the program retainers above .

Performance Compensation

Program structure for non-employee directors:

• Annual Stock Units (Director Share Plan): $75,000 grant value, number of units determined by 20-day average price before grant date; units convert into Class A shares on/after the first business day of the calendar year following board service end; include dividend equivalents .
• Annual Stock Options: Grant valued at ≤$100,000; exercise price equals closing price on grant date; options become exercisable one year after grant (service-contingent) and expire in 10 years .

FY2025 awards and details:

Performance metric linkage for directors:

Other Directorships & Interlocks

Expertise & Qualifications

• Qualifications cited by EL: Management, media, finance, retail, and consumer brand experience across Dow Jones, Liz Claiborne, and Saks; consumer/retail/private equity expertise at CCMP; board experience (Dow Jones, Francesca’s, Hillman, IAC, Ollie’s); trustee leadership at Pace University; financial expertise .
• Designations: The Board determined Zannino is independent; also designated an Audit Committee Financial Expert .

Equity Ownership

Beneficial ownership and outstanding awards (as of FY2025):

Ownership alignment and policies:

• Director Stock Ownership Guideline: ≥5x annual cash retainer ($500,000) within 5 years of initial election; common stock and stock units count; options do not; hedged/pledged shares do not count .
• Compliance status (board-wide): As of the record date, each director on the board >5 years owned stock exceeding $500,000 or received a waiver; Zannino has been a director since 2010, implying guideline applicability over that period .
• Hedging/Pledging: Hedging by directors is prohibited absent pre-approval; pledges require prior Legal Department approval (outstanding equity awards cannot be hedged) .

Governance Assessment

• Board effectiveness: Zannino’s dual role as Lead Independent Director and Audit Chair in a controlled-company structure strengthens independent oversight, especially given his financial expert designation and the Audit Committee’s broad risk remit (IT/cybersecurity, taxes, treasury, legal, related-person transactions) .
• Independence and attendance: The board deems him independent; board/committee attendance exceeded 97% in FY2025 with no director below 75%, and he presided over independent/non-management executive sessions, supporting robust independent director voice .
• Compensation alignment: Director pay structure mixes cash with equity (stock units and options) and allows cash deferral into stock units, aligning directors with shareholders over the long term through post-service share conversion; FY2025 mix for Zannino: cash $159,500; stock units $75,000; options $99,992 .
• Ownership and incentives: Meaningful stock/unit holdings and options (including indirect holdings via family trusts) indicate exposure to EL equity performance; stock ownership guidelines (5x retainer) and conversion timing of stock units promote long-term alignment .

Red flags and mitigants:

• Controlled company governance: EL is a controlled company under NYSE rules; while this can weaken certain governance safeguards, EL maintains a majority-independent board and a fully independent Audit Committee; Zannino’s leadership in these structures is a mitigant .
• Pledging allowed with approval: Company policy permits pledging with prior approval, which is less restrictive than an outright ban; however, hedging is prohibited absent pre-approval and never allowed for outstanding equity grants .
• Related-person transactions oversight: The Audit Committee (chaired by Zannino) administers the Related Person Transactions Policy and must prohibit transactions inconsistent with stockholder interests; directors recuse where they are the related person, providing procedural safeguards .

Overall, Zannino’s financial expertise, independent leadership, and committee roles provide credible oversight in a family-controlled context, with alignment reinforced by equity-holding guidelines and deferral mechanisms. Continued monitoring of pledging approvals and any related-person matters remains prudent .