Ferragamo CEO under fire for disproportionate salary
Despite the company's average performance, shareholders of Italian brand Salvatore Ferragamo have approved a compensation policy that includes generous pay for CEO Marco Gobbetti. Current debates about excessive pay seek to regulate the pay gap between executives and employees in large companies.
By Eva Morletto27 avril 2023
During the shareholders' meeting of Salvatore Ferragamo, the compensation policy proposed by the group was approved, which includes a substantial remuneration package for CEO Marco Gobbetti. However, proxy advisors Glass Lewis and Institutional Shareholder Services (ISS) urged shareholders to vote against the policy.
Marco Gobbetti, who previously served as CEO of Burberry for five years, assumed the role of CEO at Ferragamo on January 1, 2022, and currently holds one of the highest-paid positions in Italy. Nonetheless, proxy advisors argue that his salary is excessive and not in line with the company's financial performance and the salaries of other executives within the group.
In 2022, Marco Gobbetti received approximately 12 million euros, including an initial welcome bonus of 8.9 million euros, which will be paid in three installments over 24 months. In 2023, he is set to receive a fixed remuneration of 2.3 million euros and a short-term incentive plan with a target payment of 3 million euros. Despite concerns raised by proxy advisors, over 90% of shareholders supported the compensation policy.
However, the group's results are not excellent in this economic climate: sales for the first quarter of 2023 totaled 278 million euros, a drop of 4% (current exchange rates) compared to the same period of the previous year. Management justifies this decrease by restructuring the company's network in the United States and the investments related to this operation. The group has also launched an e-commerce portal dedicated to ready-to-wear and American customers.
Analysts are waiting to see how the work and results of Marco Gobbetti and the brand's new designer, Maximilian Davis, will play out this year. Davis joined Ferragamo as creative director a year ago.
There are currently several debates in the news about disproportionate pay, especially in large companies. Many countries and government agencies are considering measures to regulate the pay gap between executives and employees to ensure a more equitable income distribution. In France, the government is working on a bill to strengthen transparency and regulation of executive compensation in publicly traded companies to limit pay gaps.
The Ferragamo family controls the luxury group, which holds a 54.3% stake.
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