Ralph Lauren
RALPH LAURENAbout Ralph Lauren
Ralph Lauren (age 85) is the Founder, Executive Chairman and Chief Creative Officer of Ralph Lauren Corporation. He has served on the Board since before the company’s 1997 IPO and was Chairman & CEO until November 2015 . Under his leadership, Fiscal 2025 delivered strong performance: Total Company Revenue of $7,145.1 million (constant dollars) versus $6,631.4 million in Fiscal 2024 and Adjusted Operating Profit Margin of 14.3% vs 12.5% in Fiscal 2024 . Long-term incentives tied to multi-year performance paid out above target for the Fiscal 2023–2025 cycle: Adjusted ROIC PSUs at 200% and relative TSR PSUs at 180.88% (vs a peer comparator group), reflecting outperformance versus the PSU Comparator Group and the S&P 500 across 1-, 3- and 5-year periods .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ralph Lauren Corporation | Chairman & Chief Executive Officer | Until Nov 2015 | Led transformation into a global lifestyle brand; foundational brand stewardship |
| Ralph Lauren Corporation (pre-IPO predecessors) | Advisory Board/Board Member | Pre-1997 | Early governance and brand direction |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | — | — | No current public company directorships disclosed |
Fixed Compensation
| Component | Fiscal 2025 Amount | Notes |
|---|---|---|
| Base Salary | $1,750,000 | Unchanged from FY2024 |
| Target Bonus | $6,000,000 | EOAIP; capped at 200% |
| Actual Bonus Paid | $11,160,000 | 186% payout for Mr. R. Lauren (after modifier cap rules differ by NEO) |
| Stock Awards (Grant Date Fair Value) | $11,000,337 | 100% PSUs under employment agreement |
| All Other Compensation | $272,810 | Includes personal aircraft reimbursement ($200,000) and car/driver ($70,585) |
Performance Compensation
Short-Term Annual Incentive (EOAIP) – Fiscal 2025
| Metric | Weight | Target | Actual | Payout Impact |
|---|---|---|---|---|
| Adjusted Operating Profit Margin | 40% | 13.5% | 14.5% | Contributed to an overall 186% payout for Mr. R. Lauren |
| Total Company Revenue ($M) | 40% | $6,831.2 | $7,145.1 | Above target; supports payout |
| Strategic Growth Accelerators Revenue (YoY%) | 10% | 6% | 15.4% | Above target; supports payout |
| Adjusted SG&A (% of Revenue) | 10% | 47.1% | 47.1% | Slightly below target; modest negative impact |
| Strategic Goal Modifier (Citizenship & Sustainability KPIs) | +/-10% | — | Met/Exceeded → +10% | Modifier applied at Committee discretion (not applicable to Mr. R. Lauren’s individual adjustment rules); NEO bonuses capped at 200% |
Long-Term Equity Incentives (PSUs) – Program Design and Results
| Element | Metric | Performance Period | Target/Max Payout Terms | Actual FY2023–2025 Payout |
|---|---|---|---|---|
| PSUs – Adjusted ROIC | Adjusted ROIC | FY2023–FY2025 | Threshold 50% at 90% of goal; Target 100%; Max 200% at 110% | 200% at 111.2% achieved |
| PSUs – Relative TSR | TSR vs Comparator Group | FY2023–FY2025 | Threshold 50% at 30th pct; Target 100% at 50th; Max 200% at 90th | 180.88% at 82.35th percentile |
FY2025 Equity Grants (Awarded Aug 15, 2024)
| Recipient | PSUs – Adjusted ROIC (Target Units) | PSUs – Relative TSR (Target Units) | RSUs (Time-based) |
|---|---|---|---|
| Ralph Lauren | 33,359 | 25,054 | — |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 564,508 Class A shares; 21,881,276 Class B shares; 85.2% voting power |
| Economic Interest | ~37% economic interest held by Mr. Lauren and family |
| Deferred/Vested RSUs Not Delivered | 519,234 vested RSUs deliverable upon separation/change-in-control; Aggregate RSU balance valued at $112,326,788 at FY2025-end |
| Unvested Performance Awards (Illustrative) | FY2024 PSUs-ROIC: 94,400 units; FY2024 PSUs-TSR: 73,868; FY2025 PSUs-ROIC: 67,224; FY2025 PSUs-TSR: 50,488 (all shown at SEC-required max for disclosure) |
| Ownership Guidelines | Executive Chairman/CCO guideline: 6× base salary; all NEOs exceeded FY2025 guidelines |
| Hedging/Pledging | Company policy prohibits hedging and pledging by directors, officers, employees |
| Director Election Structure | Class A stockholders elect three directors exclusively; committee membership fully independent |
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement Term | Through April 3, 2027 |
| Compensation Structure | Base salary ≥ $1.75M; annual target bonus $6.0M; annual equity award target value $11.0M (100% PSUs) |
| Severance (Without Cause/Good Reason) | Lump sum: 2× base salary + 2× average annual bonus for prior two years; pro-rated current-year bonus; continued benefits; equity continues/vests per terms |
| Death/Disability | Immediate vesting at target for PSUs/RPSUs (with specific timing nuances) and pro-rated bonus |
| Change-in-Control | Pre-Agreement grants (1997/RSUs pre-Agreement) accelerate on change-in-control; PSUs granted during Agreement generally do not immediately vest solely due to change-in-control |
| Restrictive Covenants | Non-compete 2 years worldwide; non-solicit 3 years; non-disparagement mutual for 3 years; confidentiality |
| Clawback | Dodd-Frank compliant clawback plus legacy plan-level recoupment for restatements |
| Perquisites | Required private aircraft usage for security; Company reimburses business travel and up to $200,000 per year for personal aircraft; car/driver |
Board Governance (Dual-Role Implications, Independence)
- Role: Executive Chairman (separate from CEO) and Chief Creative Officer; Ralph Lauren is not an “independent” director given his executive role and controlling ownership .
- Dual-Class Structure: Class B shares represent ~85% of voting power and ~36% economic ownership; Mr. Lauren and family retain ~37% economic interest. Board’s independent Nominating Committee conducts annual reviews of the dual-class structure and has affirmed it, citing long-term stability and prohibitive costs to unwind .
- Governance Mitigants: 73% independent Board; fully independent committees (Audit, Talent, Nominating, Finance); robust Lead Independent Director role (expanded responsibilities in Fiscal 2023; Angela Ahrendts appointed following 2025 meeting) .
- Anti-Hedging/Anti-Pledging: Prohibitions across directors/officers/employees reduce alignment risk from collateral use or hedging .
- Board Attendance/Process: Quarterly Board and committee meetings; executive sessions at start and end; periodic third-party effectiveness reviews and ecosystem immersion tours .
Compensation Structure Analysis
- Pay Mix and At-Risk Emphasis: Mr. Lauren’s equity is 100% performance-based PSUs; overall executive compensation emphasizes variable pay with caps (e.g., EOAIP capped at 200%) .
- Performance Metrics: Short-term plan weighted to Adjusted Operating Profit Margin (40%) and Revenue (40%), plus growth accelerators (10%) and Adjusted SG&A (10%); long-term plan uses three-year Adjusted ROIC and relative TSR .
- Clawbacks/No Gross-ups: Robust clawbacks in event of restatement; no excise tax gross-ups; double-trigger vesting for change-in-control applies to NEOs under plan design, with Mr. Lauren’s Agreement specifying distinct treatment for his PSUs .
- Say-on-Pay: 97% approval at the 2024 Annual Meeting, with engagement across top institutional investors continuing in Fiscal 2025 .
Multi-Year Compensation (Summary)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Salary ($) | 1,750,000 | 1,750,000 | 1,750,000 |
| Stock Awards ($) | 11,000,014 | 11,000,149 | 11,000,337 |
| Non-Equity Incentive ($) | 5,280,000 | 6,720,000 | 11,160,000 |
| All Other Compensation ($) | 258,865 | 249,988 | 272,810 |
| Total ($) | 18,288,879 | 19,720,137 | 24,183,147 |
Equity & Awards Detail (Fiscal 2025 Year-End)
| Category | Units | Value ($) |
|---|---|---|
| FY2023 PSUs – ROIC (paid in FY2025) | 119,031 | 25,672,606 |
| FY2023 PSUs – TSR (paid in FY2025) | 80,321 | 17,323,633 |
| Unearned FY2024 PSUs – ROIC (max shown per SEC) | 94,400 | 20,360,192 |
| Unearned FY2024 PSUs – TSR (max shown per SEC) | 73,868 | 15,931,850 |
| Unearned FY2025 PSUs – ROIC (max shown per SEC) | 67,224 | 14,498,872 |
| Unearned FY2025 PSUs – TSR (max shown per SEC) | 50,488 | 10,889,252 |
Related Party Transactions and Risk Indicators
- Insider Ownership/Control: Mr. Lauren holds 85.2% voting power through Class B shares and trusts/LLC arrangements; Class B shares include restrictions and convert to Class A upon certain transfers .
- Anti-Pledging/Hedging: Policy bans pledging and hedging, reducing collateralization risk .
- Legal Proceedings: Proxy includes a section on Legal Proceedings involving directors and executive officers; no specific proceedings for Mr. Lauren highlighted in the provided excerpts .
- Dual-Class Risk: Annual review retained dual-class structure; Board cites stability and long-term stewardship benefits alongside prohibitive unwind costs .
Equity Ownership Guidelines Compliance
| Executive | Guideline | Compliance Status |
|---|---|---|
| Ralph Lauren | 6× base salary | Exceeded in Fiscal 2025 |
Investment Implications
- Alignment: 100% performance-based equity for Mr. Lauren’s annual awards and significant long-term RSU deferral until separation suggest strong alignment and limited near-term selling pressure from his equity grants .
- Performance Linkage: EOAIP and PSU metrics emphasize profitable growth (Adjusted Operating Margin, Revenue) and capital efficiency (Adjusted ROIC), with demonstrable above-target payouts for FY2023–2025 cycles .
- Governance Mitigants to Dual-Role/Dual-Class: Separate CEO/Chairman roles, robust Lead Independent Director, 73% independent Board, and independent committees partially offset founder-control risks; Class A holders elect their own directors .
- Red Flags/Optics: Required private aircraft and personal travel reimbursement ($200,000 cap) and strong control via dual-class may concern some governance-focused investors despite clawbacks, no tax gross-ups, and anti-pledging policies .
- Pay Support: 97% Say-on-Pay approval and continued investor engagement imply broad investor acceptance of the pay-for-performance framework .