Referencing {FAQ}

Tuesday, March 29, 2011

J. Crew's Drexler Inks New Deal

Another "thanks!" to Jessica who kindly shared the following article from WWD with us (click here to read in its entirety):

J. Crew's CEO Inks New Deal
By Arnold J. Karr

March 24, 2011


Millard “Mickey” Drexler, chairman and chief executive officer of J.Crew Group Inc., has a new contract that will keep him on the job until after his 70th birthday.

As part of the acquisition of J.Crew by TPG Capital and Leonard Green & Partners that closed on March 7, Drexler, 66, signed a new employment agreement that runs through the fourth anniversary of the acquisition in 2015. After that date, it is automatically renewed for one-year extensions without limit unless Drexler or the company provides notice of nonrenewal at least three months before its anniversary.

Drexler, who retains an equity interest in the firm he joined as ceo in 2003, will continue to receive a base salary of $200,000 and will remain eligible for a cash bonus with a target amount of $1.2 million, as well as time- and performance-based equity awards.


Details were disclosed in J.Crew’s annual report, filed with the Securities and Exchange Commission earlier this week. There were no modifications in the contracts of Jenna Lyons, president and executive creative director, or James Scully, chief administrative officer and chief financial officer, both of whom continue to work on the basis of automatic one-year extensions unless notice of nonrenewal is furnished at least four months prior to their anniversary dates. Their base salaries are $675,000 and $600,000, respectively, although their 2010 salaries were $885,000 and $661,000.


Excluding a cash bonus still to be calculated, Drexler last year earned $4.9 million. His $5.8 million in 2009 total earnings included a discretionary cash bonus of $2 million granted “in recognition of both individual and company performance.”


For 2010, the J.Crew ceo is eligible for cash bonuses ranging from $267,000 to up to $2 million if the company achieved earnings before interest, taxes, depreciation and amortization — EBITDA — of at least $280.3 million. Its income from operations — equivalent to earnings before interest and taxes, or EBIT — was $214 million last year. J. Crew expects to disclose Drexler’s bonus no later than April 15.
Also, big "thanks!" to Heidi who shared another article relating to the salaries & buyout over at the Daily Front Row (click here to read in its entirety).

Well, things look pretty good for Mickey. It's pretty darn good to be Jenna Lyons too! :)

What are your thoughts on this latest news? Do you think Mickey Drexler is over-paid or worth-every-penny?

16 comments:

  1. To be honest, it sounds like a lot of dough but having worked in the financial industry where the CEO (heck, all the top tier execs) have multi-million dollar packages, this seems like peanuts to me.

    Maybe I just need to get out of my industry. ;)

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  4. oh HO! Well! It sure is good to be king, isn't it?

    At this point, I think his pay should be tied to performance. The company's renewed effort of the last 2 years to brand itself as upscale hasn't jibed too well with the mega-markdowns we've seen time and again.

    Something is wrong somewhere. I know I sound like a broken record, but I just can't believe they have the kind of systems in place that they need to make good decisions about pricing and promotions. And there is simply no excuse for that with the amount of money they COULD be making.

    I don't get why they're complacent in this regard. Yes, putting something like that in place is a huge pain in the ass, but it would be so worth it from a business perspective! And maybe avoid the alienation we've been feeling with these selective promos, etc. It doesn't mean they have to change the way they're doing anything at all -- it would just enable them to quickly move out stock that isn't selling instead of letting in languish.

    JMO.

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  5. I agree with Elaine. The changes of the last couple years haven't really paid off, and it's time to go in another direction IMO. I've almost stopped buying at J. Crew since my all time high years in 2007 and 2008. If their recent financial results are any indication, many of us are buying less, and/or waiting for big markdowns before we bite. Drexler is the leader of this company, his pay should reflect the company's performance. Which of late has not be great.

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  6. gee, imagine what they could have accomplished with a really incentive-based compensation program!

    so what do we learn from this? for one, that the perceived flaws in the website/ordering/returning technology, the delayed crediting of mail returns, and the like, are the result of conscious business decisions made by devoted corporate leaders.

    and there is the lingering impression that they really can afford to lock the Copywriter from Space in a room with a copy of Strunk & White, and send Clumsy Photoshop Guy to an off-site workshop other than Comic-Con.

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  7. Don't forget the Web Designer from Space! Check out the "fixed" page for the silk driving scarf, 24826.

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  8. silver lining,

    I noticed the scarf thing yesterday too. What a joke! I try to order from JCrew and it is a hassle so I give up and go elsewhere with my $$$. I had a gift to buy yesterday and looked at JCrew first but eneded up ordering from Talbots and Kohls b/c of the free shipping no minimum. I still check JCrew first but they are getting less and less of my money. I saw where LLBean has gone to free shipping all the time now:) They are "with it".

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  9. I saw that not from LL Bean as well, Genny. I'm just so screwed, because I've reached a point where I basically wear nothing but J Crew. I feel very vulnerable now, lol! I buy MUCH less now than I ever did, and what I do buy absolutely must be on sale, or I'll feel like a fool when it's marked down the day after I order it.

    I still love the brand and love the clothes, despite the flaws of both. I just really don't know what goes on behind closed doors there!

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  10. Bahaha! No wonder why the CS was such a grinch on not allowing me to return a $17 pair of shorts that were too small for my 5 year old...robbing money from the hands of babes I tell ya! The joke is on me, no?

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  11. I'm all for pay for performance, but I don't see the performance. And this is a more emotional reaction, but every time I think about him, it raises the $800 umbrella spectre.

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  12. Elaine,

    I used to wear nothing but JCrew for many years and was a HUGE fan and checked the website multiple times a day. I no longer do that after 7, 8, 9+ years of "the JCrew sickness". I have lost count now how many years I was obsessed. But all good things must come to an end I realize. I was having the same excited panic attacks I used to get from JCrew catalogs when I got my Talbots April catalog yesterday. I also got the JCrew April one the day before...I tried to like but just couldn't find much!

    Time to pass the torch to great fans like yOu:)

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  13. I gave it a good go today, Genny, I really did. I made a point od stopping in AT, ATL and BR and I just couldn't find one thing I liked. BR especially was disappointing -- some of the things I saw were so ugly and bizarre that I kept waiting for someone to scream out 'SIKE!' and remove the fake walls full of fake merchandise and show me where the real stuff was.

    But alas, nay.

    I left the mall wondering if there was something wrong with me! lol.

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  14. Mickey must be doing something right to get this compensation package. I don't know what it is but someone must have a clue. I hope - for the sake of the company.

    Elaine, you may want to try some smaller boutiques instead of mall stores if you are actually looking to branch out. There are a lot of different brands with very affordable current and classic offerings out there if you have the time and patience to look. Small shops often have staff that will put in the effort to help you find things that really work. Of course if you're happy wearing all J.Crew then you're right where you want to be and I believe it is a good thing to know what you want.

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  15. I agree with what Lindsay said. This is not big money by any means. Let's not forget how much athletes getting paid, and not sure for what.

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  16. Elaine,

    I understand....I used to like BR and I rarely find anything I like there now. I think summer 2009 was the last I bought anything from them; I did see some fall 2010 items I really liked but did not have time to try anything on and when I went back all was sold out. I buy Land's End, Talbots, AT Loft (accessories only), and LLBean (accessories)b mainly now with a few JCrew pieces here and there. JCrew swimsuites and flip flops are still the best:) but I have stocked up on them the past two years so don't need anymore now;)

    My daughter no longer is into Crewcuts and likes Justice and Land's End.

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