Korn Ferry survey: Retail CEOs worried about upcoming pay disclosure ruling
The upcoming implementation of a new ruling by the Securities and Exchange Commission is causing concern among retail chief executives.
The SEC’s new CEO Pay Ratio ruling requires public companies to disclose the ratio of total compensation of CEO to the total compensation of the median employee. According to a survey by Korn Ferry, 64% of retailers are concerned about explaining the meaning of the CEO pay ratio to employees, and 56% are concerned with the comparison of their ratio to that disclosed by other retail companies.
Nearly half (48%) are not going to address the pay ratio disclosure ruling with their employees, the survey found. Only 20% said they would address the issue with employees, and 32% are undecided.
In other findings:
• Three-quarters (76%) responded that their median employee will be part-time for the purposes of the ratio calculation. The median income reported by the retailers for part-time employees was $12,000 to $14,000.
• Retailers reported anticipated pay ratios from 100 to more than 2000. The majority of respondents reported their CEO ratio is likely to between 200 and 1100 of the median employee total compensation.
• Seventy percent will use W-2 earnings as the “consistently applied compensation measure” to determine the median employee.
“Retailers are concerned that their pay ratio is likely to be higher than other industries because of the significant use of entry-level, part-time employees,” said Craig Rowley, Korn Ferry senior client partner, consumer and retail. “Other industries that predominantly use full-time employees are expected to have CEO pay ratios in the 100 to 600 range.”
Korn Ferry recommends that retail organizations not hide the ratio from their employees.
“Instead, we recommend putting forward clear communication on how the ratio is calculated and why it is not a clear measure of compensation in the organization,” said Cory Morrow, senior client partner, executive pay & governance, Korn Ferry Hay Group.
Skechers taps Mattel exec for key finance role
Skechers USA is expanding its executive team to keep its expanding international business.
The footwear brand has appointed John Vandemore to serve as CFO. With the appointment, David Weinberg — who had been filling both CFO and COO roles — will be able to focus more attention on the company’s operations in support of its continued growth around the globe. Vandemore will report directly to Weinberg and assume his new position within the next few weeks.
In his ongoing role as COO, Weinberg will continue to be responsible for the day-to-day operations of the company. He will devote particular attention to increasing efficiencies in the international business, which is now the main driver of the brand’s overall growth.
“As international now represents more than 50 percent of our total business, we must continue to ramp up operations and infrastructure to meet the demand,” stated Robert Greenberg CEO of Skechers. “David (Weinberg) understands how to do it the right way at the right speed to maintain our forward momentum. With John (Vandemore) handling CFO responsibilities, David will now have the bandwidth to travel and find opportunities to maximize our efficiencies around the globe.”
Weinberg has been with Skechers since it was founded in 1992, and was named CFO in 1993 and COO in 2006. He has also served as executive VP and a member of the board.
Incoming CFO Vandemore has served as executive VP and division CFO of Mattel Inc. Prior to that he was the CFO and treasurer of International Game Technology Plc, a computerized gaming machine manufacturer. And he spent 12 years in operations and finance roles at The Walt Disney Company (NYSE: DIS) including five years as VP and CFO of Walt Disney Imagineering.
Sketchers footwear is available in the United States and over 160 countries and territories worldwide via department and specialty stores, along with 2,438 company-owned and third-party-owned Skechers retail stores.
Francesca’s taps Penney exec to head up merchandising
Francesca’s Holdings Corp. has appointed a retail veteran as its new chief merchant.
The specialty retailer named Ivy R. Spargo as senior VP and chief merchandising officer, effective Nov. 27. She succeeds Laurie Hummel, who left the chain in August after less than two years in the position. No reason was given for her departure, but the chain cited missteps in merchandising for its disappointing second quarter performance.
Spargo was most recently senior VP, general merchandise manager of Sephora inside J.C. Penney and women’s specialty apparel for Penney, where she was responsible for developing and leading the strategic plan and direction for these businesses.
Prior to joining Penney in 2013, Spargo served as VP and general merchandise manager for women’s apparel and accessories at Lands’ End Inc. Before that, she held various merchandising roles at Nike Inc. She also worked at The Limited.
“Ivy is a strong leader and a strategic thinker who has a deep specialty retail background and brings with her more than 20 years of retail experience,” stated Steve Lawrence, president and CEO, Francesca’s, which operates 692 stores. “We believe that Ivy’s insights and expertise will enable her to quickly embrace our target customer as she guides the team in consistently delivering a broad and shallow assortment of unique fashion at great value to the Francesca’s customer.”