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LONDON — They're changing the guard at Burberry Group plc — and the choice is a surprise.
Angela Ahrendts, executive vice president of Liz Claiborne Inc., has been tapped to replace Rose Marie Bravo as Burberry's chief executive officer. Bravo will step down in July when her contract expires.
Bravo, however, will remain with the company in the newly created role of vice chairman. She will spend the first six months of next year working closely with Ahrendts, who will join Burberry on Jan. 9 as an executive director. Ahrendts, 45, will take over the top job on July 1.
Bravo, 54, said her successor — who has also done stints at Henri Bendel and Donna Karan International — fits well into the Burberry mosaic. "She's a true leader and a team player," she said, adding her successor was also a natural fit with Burberry's creative director, Christopher Bailey. "The two already worked together at Donna Karan, and have a good relationship."
Ahrendts added in a telephone interview: "[Bravo] has left a phenomenal foundation to build upon with the world-class management team she has put in place. There are a lot of initiatives they are working on right now, and a lot of new product launches, including fragrance launches. The timing is great with where [Bravo] is at this stage of the business."
At Burberry, Ahrendts will receive an annual base salary of $1.3 million. Her annual bonus will be tied to the company's performance when she takes over. She will be able to receive a maximum of 150 percent of her base salary, or up to $1.95 million.
In addition to the bonus, she has access to a long-term "personal performance" plan. Under the terms of that plan, she'll be eligible to receive up to $4 million in cash between 2006 and 2008, inclusive. How much she receives will depend on whether she reaches targets she sets together with the company.
Burberry will also provide Ahrendts with $3.9 million worth of stock options that will vest over a five-year period. Their final value will depend on Burberry's share price when the options vest.
The company will also pay her $4 million over a two-year period to compensate for the loss of incentives at Liz Claiborne Inc.