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Levi’s overall sales last year were off 2.9 percent, to $4.14 billion.
The amount of Marineau’s compensation exceeds Levi’s reported net income last year, which was $25 million.
Consultant Andrew Jassin, of Jassin-O’Rourke Group, said it’s hard to justify paying a ceo more than a company makes in a year.
“This level of executive compensation can’t be measured in any way that’s sensible,” he said.
The company has remained profitable through the seven-year period its sales have been in decline, though profits have varied widely in recent years, dipping to $5.4 million in 1999 and climbing back up to $223.4 million in 2000. Since then, earnings have slumped.
Levi’s 2002 fiscal year ended Nov. 24, more than a month before most top apparel companies, so it’s not yet clear where Marineau will rank on last year’s ceo pay scale. But his pay exceeded the 2001 compensation of all other ceo’s of publicly traded apparel manufacturers, nudging ahead of Tommy Hilfiger, who topped the last WWD vendor pay index with a 2001 pay package of $24.9 million. Tommy Hilfiger Corp.’s fiscal year ends March 31.
To find a substantially higher apparel vendor paycheck than Marineau’s, one needs to look back to 1998, when Linda Wachner, then chairman and ceo of Warnaco Group Inc., earned $104 million — largely as the result of $87.3 million in stock options she exercised that year.
Sources said that Levi’s tends to pay salaries that are on the low side and primarily compensates its top brass through the leadership shares program.
“It’s not too dissimilar to public companies that offer stock options,” said Elaine Hughes, principal at the New York executive search firm E.A. Hughes & Co. “They need another mechanism which offers incentives and they are long-term incentives, which keep people for some time.”