Stéphane de La Faverie
ESTEE LAUDER COMPANIESAbout Stéphane de La Faverie
Stéphane de La Faverie is President & CEO of The Estée Lauder Companies (EL) and a member of the Board effective January 1, 2025; he joined EL in 2011 and previously served as Executive Group President (Sep 2022–Dec 2024), Group President and Global Brand President (Jul 2020–Aug 2022), and Global President, Estée Lauder (Jul 2016–Jun 2020). He is listed as age 51 in the 2025 proxy and became a director in 2025; the CEO appointment 8‑K notes he was age 50 as of late 2024 and confirms his multi-brand leadership and succession to CEO .
Company performance context in FY2025 (first year of his CEO tenure, which included two quarters): EL reported a negative TSR and lower adjusted EPS, highlighting a challenging setup for incentive alignment in the transition year .
| FY2025 Company Pay vs Performance Context | Value |
|---|---|
| Value of initial $100 investment (TSR) | $45.86 |
| Peer Group TSR (initial $100) | $170.04 |
| Net Earnings (Loss) | $(1,133) million |
| Adjusted Diluted EPS change | (42)% |
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| The Estée Lauder Companies | President & CEO; Director | 2025–present | CEO to drive Profit Recovery and Growth; Board member |
| The Estée Lauder Companies | Executive Group President | Sep 2022–Dec 2024 | Oversaw key brands (Estée Lauder, Jo Malone London, The Ordinary, Le Labo); led global strategy for makeup and fragrance |
| The Estée Lauder Companies | Group President, EL Companies, and Global Brand President, Estée Lauder & AERIN Beauty | Jul 2020–Aug 2022 | Oversaw portfolio of skin care and luxury fragrance brands |
| The Estée Lauder Companies | Global President, Estée Lauder | Jul 2016–Jun 2020 | Drove brand performance globally |
| L’Oréal Group – Luxury Division (Lancôme Global; Lancôme USA) | Various marketing/brand roles | Pre-2011 | Managed marketing for fragrances and skin care (face/body) at Lancôme USA |
| Giorgio Armani USA (L’Oréal Paris) | General Manager | Pre-2011 | U.S. leadership for Armani beauty |
External Roles
- No additional public company board roles are disclosed in the referenced 8‑K announcement and 2025 proxy excerpts for Mr. de La Faverie .
Fixed Compensation
| Component | FY2025 | FY2026 | Notes |
|---|---|---|---|
| Base Salary | $1,500,000 | $1,500,000 | 2025 prorated due to mid-year CEO transition |
| Target Annual Incentive | $3,000,000 | $3,000,000 | Prorated for FY2025 CEO time |
| Target Annual Equity | $10,000,000 | $10,000,000 | FY2025 equity prorated to $6,740,500, incl. additional $3,259,500 grant, subject to Subcommittee approval |
| 2025 Equity Mix | 40% PSUs; 40% RSUs; 20% Options | — | |
| 2026 Equity Grant (Aug 2025) | — | ~$10.5M; 60% Options; 40% RSUs | Reflects individual performance factor application |
| One-time cash | $25,000 | — | Plus approx. $25,000 tax gross‑up |
| Perquisites | Up to $25,000 perqs; $5,000 financial counseling; $1,100/mo auto; company-paid exec term life insurance face amount $5,000,000; spousal/partner travel up to 2 itineraries/fiscal year | — |
Additional compensation disclosure (FY2025 PVP table, CEO totals):
- Summary Compensation Table Total (SCT) for Mr. de La Faverie: $9,613,508; Compensation Actually Paid (CAP): $6,852,706 .
- CEO pay ratio (annualized for FY2025): 352:1; median employee comp $38,149; annualized CEO comp $13,422,486 .
Performance Compensation
Annual Incentive (EAIP) – FY2024 (while Executive Group President)
| Metric | Weighting | Actual Performance/Payout (Mr. de La Faverie) |
|---|---|---|
| Business Unit Strategic Goals (Individual) | 20% | 114.0% payout of opportunity |
| Total Company Net Sales | 5% | 80.3% payout |
| Total Company NOP Margin | 5% | 0.0% payout |
| Division Net Sales | 20% | 81.5% payout |
| Division NOP Margin | 20% | 82.4% payout |
| Online Net Sales | 10% | 96.2% payout |
| Online NOP Margin | 10% | 115.0% payout |
| Weighted Forecast Accuracy | 10% | 93.0% |
| Corporate/Enterprise Multiplier | — | 80.0% (applied) |
| EAIP Target and Payout | $1,600,000 target; 72.0% payout; $1,152,250 paid |
EAIP goal structures for FY2024 used threshold/target/maximum levels across Company Sales and NOP Margin and Division metrics; the table shows Mr. de La Faverie’s targets and results by criterion .
Long-Term Equity and CEO Promotion Awards
- CEO promotion grants (Feb 24, 2025): PSUs, RSUs, and stock options; RSUs and options vest in equal thirds beginning Feb 2026 and annually thereafter; PSUs generally tied to three-year Net Sales, Diluted EPS, and ROIC goals set Aug 2024 for the period ending Jun 30, 2027 .
- FY2025 equity mix: 40% PSUs, 40% RSUs, 20% Options .
- FY2026 annual grant (Aug 2025): ~$10.5M, 60% Options, 40% RSUs .
Profit Recovery and Growth Plan Incentive Program (PRGP IP)
| Feature | Term |
|---|---|
| Eligibility | FY2025 and FY2026 |
| Target | 25% of annual equity award target; max 50% |
| Instrument | RSUs granted in Aug 2025 and Aug 2026 |
| Vesting | Two-year cliff vesting, subject to plan terms and Subcommittee approval |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Stock vested in FY2025 | 10,687 shares vested/paid; value realized $763,186 (incl. $421,000 from 5,865 shares delivered on Nov 1, 2024 from a Sep 2021 non‑annual RSU); 2,669 shares withheld for taxes on annual RSUs ($178,000) and 3,244 shares withheld for taxes on 2021 RSU delivery (~$216,000) |
| Options exercised FY2025 | None |
| Dividend equivalents on unvested RSUs | $69,313 as of Jun 30, 2025 (value of RSU dividend equivalents) |
| Upcoming vesting cadence (CEO awards) | RSUs/Options from Feb 24, 2025 grant vest in equal thirds in Feb 2026, Feb 2027, and Feb 2028 (subject to continued service and plan terms) |
Note: Beneficial ownership totals, ownership as % of outstanding, and EL-specific hedging/pledging prohibitions were not found in the cited excerpts; the 2025 proxy does disclose dividend equivalents on RSUs and vesting schedules .
Employment Terms
| Term | Key provisions |
|---|---|
| Employment status | At‑will; CEO effective Jan 1, 2025 |
| Compensation setting | Base salary and bonus by Compensation Committee; equity by Stock Plan Subcommittee |
| Perquisites | Up to $25,000 perqs; $5,000/yr financial counseling; $1,100/month auto; company-paid executive term life (face $5,000,000); spousal/partner travel up to two business itineraries/year |
| One-time payments | $25,000 cash upon amendment; approx. $25,000 tax gross‑up |
| Non‑compete | Company may enforce a two‑year non‑compete; if enforced, post‑termination payments include up to two years of base salary and benefits (and certain retirement plan participation equivalents) |
| Change‑in‑Control (CIC) – vesting | Options/RSUs: double‑trigger; Annual PSUs (Aug 2024 grant): single‑trigger; CEO PSUs granted Feb 2025: double‑trigger |
Potential CIC amounts as of June 30, 2025 (illustrative, based on then‑outstanding awards):
| Scenario (if CIC on 6/30/25) | Amount |
|---|---|
| Options and RSUs (double‑trigger: CIC + qualifying termination) | $2,895,452 |
| Annual PSUs (Aug 2024, single‑trigger on CIC) | $929,120 |
| CEO PSUs (Feb 2025, double‑trigger) | $707,502 (requires CIC + qualifying termination) |
Board Governance
- Board service: Director since 2025 (Class III); Age 51 .
- Committees: The director biography panel lists no committee roles for Mr. de La Faverie; committee membership is not disclosed for him in that section, while other directors list committee affiliations .
- Dual‑role implications: CEO and director; William P. Lauder stepped down as Executive Chairman and remains Board Chair, separating CEO and Chair roles; Charlene Barshefsky serves as Presiding Director, reinforcing independent leadership on the Board .
Investment Implications
- Pay-for-performance alignment: FY2024 EAIP paid at 72% for Mr. de La Faverie, reflecting shortfalls on NOP margin and divisional sales, partially offset by strong online NOP margin and strategic/forecasting components—suggesting moderate linkage to operational outcomes before CEO promotion .
- Retention risk and selling pressure: CEO promotion grants vest in equal thirds (Feb 2026–2028); PRGP RSUs grant in Aug 2025 and Aug 2026 with two‑year cliff vesting—creating identifiable windows (calendar 2027 and 2028) when larger tranches could deliver/settle and influence supply dynamics; no FY2025 option exercises were reported .
- Change‑in‑control economics: Mixed triggers—annual PSUs with single‑trigger on CIC and CEO PSUs with double‑trigger—imply higher acceleration risk for annual PSU cohorts if a transaction occurs, while CEO PSUs require termination; quantified amounts as of 6/30/25 provide a baseline for potential CIC overhang .
- Governance checks: Separation of Chair and CEO roles and presence of a Presiding Director mitigate CEO/Chair concentration risk; CEO is an inside director with no committee assignments disclosed in the director profile excerpt, supporting standard independence practices at key committees .
- Perks and one-time gross-up: Modest one‑time cash and tax gross‑up and ongoing perqs (auto, counseling, life insurance, limited spousal travel) are present but not outsized; non‑compete payments if enforced (up to two years base/benefits) add cost but support protection of franchise IP and talent .
Overall, incentive structures emphasize multi-year PSUs (Net Sales, Diluted EPS, ROIC) and sizable option exposure from FY2026 grants, aligning with turnaround and margin recovery objectives; watch for execution on PRGP milestones and February/anniversary vest dates for potential flow and 10b5‑1 activity disclosures .