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Earlier this week, Stéphane de La Faverie was named the Estée Lauder Cos.’ new president and chief executive officer, effective Jan. 1. Now his pay package has been revealed.
According to company filings with the Securities and Exchange Commission, his base salary will be set at an annual rate of $1.5 million and his aggregate bonus opportunity at target will be $3 million, which for fiscal 2025 will be prorated based on his time in the role of president and CEO. Additionally, he will receive a one-time cash payment of $25,000 in connection with entry into the amendment.
De La Faverie’s annual equity-award target opportunity will have a value of no less than $10 million. For fiscal 2025, his total equity-award target opportunity will be prorated at $6.7 million, which includes an additional grant with value of $3.2 million.
He will also be eligible to participate in Lauder’s Profit Recovery and Growth Plan incentive program for fiscal 2025 and fiscal 2026 at a target opportunity of 25 percent of his annual equity based compensation award target opportunity, up to a maximum of 50 percent, the achievement of which could result in a grant of restricted stock units in August 2025 and August 2026.
The same SEC filing stated that effective Jan. 1, current CEO Fabrizio Freda will serve as a special adviser to the company until his retirement on June 30. Freda is required to devote not less than 20 percent of his time to his responsibilities in this role.
During this period, Freda’s annual base salary rate of $2.1 million will remain unchanged. His annual target bonus opportunity for fiscal 2025, which includes the period he is serving as president and CEO, and fiscal 2026 will remain at $5.8 million. Pursuant to the amendment, Freda will receive an equity award target opportunity for fiscal 2026 with a value at the time of grant of $12.5 million.
Freda will be eligible to participate, for fiscal 2025 only, in the PRGP incentive plan at a target opportunity of $3.1 million.
As previously reported, Freda’s total pay package for the fiscal year 2024 is $17.8 million, down from $21.8 million in the previous year and $25.4 million in 2022. Some of this will be made up of stock options, the full value of which might never be realized due to fluctuations in stock prices and vesting schedules.
William P. Lauder, who will be departing his role as executive chairman, will see his current compensation and benefits remain unchanged through March 1 when he retires, except that his annual bonus payout, if any, for fiscal 2025 will be prorated due to his retirement.
And as William Lauder makes his transition from executive chairman to chair of the board, the position of presiding director held by Charleme Barshefsky will be replaced by a new lead independent director role to be held by Richard Zannino, managing director of CCMP Capital.
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