William Lauder

About William P. Lauder

William P. Lauder (age 65) is Chair of the Board at The Estée Lauder Companies and a long-serving director since 1996. He retired from employment on February 28, 2025 after previously serving as Executive Chairman (2009–Nov 8, 2024), CEO (2008–2009), President & CEO (2004–2008), COO (2003–2004), Group President (2001–2002), President of Clinique (1998–2001), and President of Origins (pre‑1998); he joined ELC in 1986 . He is a Lauder family member and not independent; he currently serves on the Nominating and ESG Committee .

Past Roles

External Roles

Board Governance

• Independence: Not independent; Lauder family stockholder; serves on Nominating and ESG Committee .
• Committee assignment: Nominating & ESG Committee member; Board Chair (additional responsibilities outlined in Corporate Governance Guidelines) .
• Controlled company: Lauder family and related entities hold ~84% of voting power; dual‑class structure with 10:1 votes on Class B; family Stockholders’ Agreement designates nominees, including William P. Lauder; sunset provisions described .
• Attendance: In FY2025, Board/Audit/Compensation met 7 times; Nominating & ESG met 5 times; total combined attendance >97%; no director <75%; six executive sessions of non‑employee directors and one of independent directors; all directors attended 2024 Annual Meeting .
• Lead Independent Director: Richard F. Zannino (Audit Chair) serves as Lead Independent Director; structure pairs non‑independent Chair with independent LID .

Fixed Compensation

Post‑retirement (from employment) benefits and deferred plans:

• Deferred compensation payout: ~$7.1 million paid in September 2025 under his deferred compensation account (credited annually at Citibank base rate, capped 9%) .
• RGA Plan balance: ~$851,900 as of June 30, 2025 (electable distribution; can defer to age 73) .
• Restoration Plan balance: ~$8,341,800 paid annually over five years starting September 2025 (Section 409A compliant) .
• Healthcare: Lifetime annual supplemental healthcare payments ($7,600), plus payments in lieu of medical ($6,800) and dental (~$2,850) per year from April 1, 2025 .
• Car lease/insurance: Company pays ~$2,200 per month .
• Annual gratis products for life up to $1,280; unused vacation payout $150,862 (paid Mar 15, 2025) .

Performance Compensation

• FY2025 non‑employee director equity: None granted to William due to conversion to non‑employee status after the November 2024 annual grant date .
• FY2025 executive equity granted pre‑retirement (Aug 2024): Aggregate value ≈$2,610,000 with mix 40% PSUs, 40% RSUs, 20% options; PSUs target 11,242 shares; RSUs 11,242 shares; stock options 17,427 shares at $92.87 strike .
• Outstanding executive awards at June 30, 2025 and vesting/cycle:

Other Directorships & Interlocks

• Public company boards: Within past five years, director at ICG Hypersonic Acquisition Corp.; prior director roles at GLG Partners and Jarden Corporation .
• Non‑profit/academic boards: Fresh Air Fund (Chair), 92NY, Partnership for NYC, Emeritus Trustee at University of Pennsylvania and Trinity School; Co‑Chair of Breast Cancer Research Foundation .
• Family Stockholders’ Agreement: Lauder family parties control ~84% voting power and designate nominees, including William; creates governance interlocks across family entities .

Expertise & Qualifications

• Global brand, consumer/luxury, marketing, and R&D‑driven innovation leadership through ELC senior roles .
• Financial and corporate strategy experience; long tenure and deep company knowledge .
• Board experience (public and private) and civic leadership roles .

Equity Ownership

• Company voting structure: At record date, 234,815,064 Class A and 125,542,029 Class B outstanding; Class B equals ~35% of total shares but carries 10x votes .

Governance Assessment

• Independence and committee service: Not independent and serves on the Nominating & ESG Committee—permitted under NYSE controlled company exemptions, but a governance tension for investors who prefer fully independent nominating/comp committees .
• Controlled company risks: Dual‑class (10:1 voting) and family Stockholders’ Agreement (~84% voting power) reduce minority shareholder influence and embed family control; sunset provisions exist but contingent on ownership thresholds .
• Attendance/engagement: Board and committees show high attendance (>97% in FY2025) and regular executive sessions—positive engagement signals .
• Director pay alignment: Clear director ownership guidelines (≥$500k value within 5 years); stock units and options enhance alignment; hedged/pledged shares do not count toward guidelines .
• Related‑party transactions: Office space/services with Lauder family affiliates (approx. $7.9m received for William/Gary affiliate); occasional charter use of aircraft indirectly owned by William (≈$11,500 paid; his interest ≈$11,000) at market rates—transparent disclosure but potential perception risk; oversight under Related Person Transactions Policy by Audit Committee .
• Family pledging RED FLAG: Ronald S. Lauder has Class B shares pledged to secure loans—while not attributable to William, it is a broader family control risk factor that investors monitor .
• Say‑on‑pay signal: Prior advisory vote approval ~92% (FY2023), indicating general shareholder support for compensation framework—macro confidence signal, albeit focused on NEOs, not directors .

RED FLAGS: Controlled company with concentrated voting power; non‑independent directors (including William) on key governance committees; ongoing related‑party arrangements with family affiliates; family member share pledging (Ronald S. Lauder) .

Positives: High attendance and structured executive sessions; independent Lead Director and independent Audit Chair; explicit director ownership guidelines; transparent related‑party oversight policy; clear disclosure of post‑retirement benefits and deferred plan treatments .

Notes on Employment & Contracts (historical, pre‑retirement)

• Employment agreement (WPL Agreement): At‑will; compensation set by Compensation Committee; equity by Stock Plan Subcommittee; perquisites included (e.g., $20,000 annual perquisite reimbursement; $5,000 financial counseling; exec auto program; additional life insurance up to $5 million through June 2025) .
• Retirement treatment of equity: PSUs and RSUs continue to vest/pay per schedules; unvested options became immediately exercisable and remain until original expiration .

Director Compensation Detail (FY2025)

Related‑Party Transactions (Exposure Summary)

• Office space/services: Payments received from Lauder affiliates (William/Gary affiliate ≈$7.9m; deposits ≈$921k) .
• Aircraft charter: Company paid ≈$11,500 for business travel on aircraft indirectly owned by William; his interest ≈$11,000; capped at market rates .
• Policy/oversight: Transactions reviewed under Related Person Transactions Policy administered by Audit Committee .

Conclusion for Board Effectiveness and Investor Confidence

EL’s controlled company structure and William’s non‑independent status on the Nominating & ESG Committee are governance constraints for minority investors, balanced by robust attendance, an empowered independent Lead Director/Audit Chair, and explicit ownership/oversight policies. The extensive disclosure of related‑party arrangements and clear treatment of William’s post‑retirement benefits improve transparency, but investors should continue monitoring committee independence, related‑party volume, and any expansion of pledging practices across the family entities .