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February 16, 2012 3:12 PM

Michael Kors: The $666 Million Man

Let's be clear: Michael Kors is on a pretty good run, but it's not that he hasn't had a few disappointments....

Let's be clear: Michael Kors is on a pretty good run, but it's not that he hasn't had a few disappointments. He, for instance, is not a teacher in Ontario. 

So far, they are the real winners in Kors' December IPO. The Ontario Teachers Pension Plan Board was the only named Kors investor that didn't sell stock in the public offering. 

And so instead of getting $20 a share -- as Kors himself did when he sold off 5.8 million shares, raising $117 million -- the pension plan's 13.2 million shares are now worth $42.08 each. 

Kors, sadly, sold at what now seems to be a low price. 

He might have another chance to get a better valuation since he, along with chief executive officer John Idol and backers Silas Chou and Lawrence Stroll, also has a stake in the Michael Kors operations in China, Hong Kong, Macau and Taiwan, which were not part of the IPO. 

And he has steady employment. 

The designer's contract gives him a job for life, an annual salary of $2.5 million and creative control over products bearing his name, assuming he can stay on the right side of "commercially reasonable." (The Wall Street types apparently don't approve of art for art's sake.) Kors is also eligible for a bonus and certain "perquisites" including life insurance, health club membership, car and driver for business purposes and tax services. 

It's not the deal scored by Tommy Hilfiger -- who received 1.5 percent of U.S. revenues over $48 million when his company was public -- but it seems to be enough for Kors to keep the heat on. 

If he does have to dip into the piggybank, he still owns 15.8 million shares of the company that bears his name, or 8.3 percent of those outstanding. On paper, that's worth $666.8 million, so he could always buy half a million of his $1,295 shearling racing jackets to keep warm. 

That's something, at least.
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