Luxury watches displayed at Richemont’s Montblanc store in Beijing. Swiss luxury group Richemont had paid its group chief executive Jérôme Lambert a total remuneration package of CHF8.06 million (R144.8m) for the year to March. Photo: Bloomberg
Luxury watches displayed at Richemont’s Montblanc store in Beijing. Swiss luxury group Richemont had paid its group chief executive Jérôme Lambert a total remuneration package of CHF8.06 million (R144.8m) for the year to March. Photo: Bloomberg

Swiss luxury group Richemont boss scores nearly 50% pay hike

By Sandile Mchunu Time of article published May 28, 2020

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DURBAN – Swiss luxury group Richemont had paid its group chief executive Jérôme Lambert a total remuneration package of CHF8.06 million (R144.8m) for the year to March, up by 49.54 percent compared to last year’s CHF5.39m, according to its annual report released on Wednesday. 

Lambert’s current package consists of an annual salary of CHF2m, post employment benefits of CHF112 947, short-term incentive of CHF1.44m, share-based awards of CHF4.16m and social security cost of CHF332 902.

However, his annual salary of CHF2m was up by 7.53 percent compared to last year’s CHF1.86m.

Clay Brendish, the chairperson of the compensation committee, said the group had put structures in place for the remuneration of the group's executives and employees which remained under continual review by the committee to ensure that executives are remunerated fairly and in line with the group's strategic objectives.

“Incentivising creativity and long-term value creation becomes ever more important in the current difficult economic climate, and the committee remains dedicated to ensuring that these principles are appropriately applied,” Brendish said.

The annual report comes after the group reported a 2 percent increase in sales to €14.24 billion (R272.2bn) for the year to end March, impacted by an 18 percent decline in sales for the fourth quarter as a result of the outbreak of Covid-19 in some of its regions. Its operating profit decreased by 22 percent to €1.52bn.

The group’s chief financial officer (CFO),Burkhart Grund, received a total remuneration package of CHF6.03m, up by 11.87 percent compared to last year’s CHF5.39m. His annual salary remained flat at CHF1.52m, but his total package was boosted by share-based awards of CHF3.51m in the current year compared to the stock option award of CHF1.74m last year.

Other senior executive committee directors in the group like Nicolas Bos, the president and chief executive of Van Cleef & Arpels, took home a total package of CHF9.21m during the year, up by 88.34 percent compared to last year’s total package of CHF4.89m.

The group said during the year Bos, Lambert and Emmanuel Perrin also received a cash payout as a result of a long-term incentive award made in 2016 as compensation for their positions as brand executives at that time.

Overall Richemont paid a total compensation of CFH49.31m to its senior executive committee directors during 2020, and this was up by 29.46 percent compared to last year’s total compensation of CHF38.09m.

Group chairperson Johann Rupert earned fees of CHF2.70m during the year and the amount increased to CHF3.09m, which included the social security cost of CHF393 068.

Last year, Rupert earned CHF1.35m in fees as well as CHF1.35m in post-employment benefit for a total amount of CHF2.7m. The group’s non-executive directors earned a combined total of CHF7.93m in fees during the year, up by 4.20 percent compared to last year’s CHF7.61m.

BUSINESS REPORT

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