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It wasn’t just companies’ balance sheets that suffered in 2020. In the wake of the COVID-19 pandemic, many of beauty’s top executives took significant pay cuts, often on a voluntary basis, for the year.
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In April last year, The Estée Lauder Cos. said that several levels of employees — including president and chief executive officer Fabrizio Freda and chairman emeritus Leonard Lauder — would take pay cuts from May through October. Both cut their base salaries by 50 percent — with Freda getting a base salary of $1 million. In the year ended June 30, 2020, Freda took home a total of $18.4 million, a 14 percent decline on his total payout for the prior-year period.
He was not alone. At Walgreens Boots Alliance, CEO Stefano Pessina’s total pay fell 9.6 percent to $17.5 million in the year ended Aug. 31.
LVMH’s Bernard Arnault and the company’s board members relinquished their remuneration for April and May 2020, as well as variable remuneration for the year. Arnault’s total compensation for 2019 was 8 million euros ($9.1 million), of which 1.1 million euros ($1.3 million) was base salary. 2020 figures were not yet available at press time.
In the year ended Sept. 30, Edgewell Personal Care’s president and CEO Rod Little’s total remuneration declined 5.2 percent, to $6.5 million.
Hermès’ management, meanwhile, agreed to freeze their annual fixed and variable compensation for the year. That meant CEO Axel Dumas’ total pay for 2020 was flat at 3.4 million euros ($3.9 million). His variable compensation relating to 2020, to be paid this year, will drop 10.4 percent, in line with the company’s decline in pre-tax profits, to 1.6 million euros ($1.8 million), Hermès said.
At Unilever, CEO Alan Jope took a 29.6 percent drop in total pay, to 3.5 million euros ($4 million).
In May last year, L’Oréal waived 30 percent of the maximum fixed and variable remuneration for 2020 of its executive corporate officers and of any performance shares granted in 2020. That resulted in a 68.8 percent pay cut for chairman and CEO Jean-Paul Agon, who took home 3.1 million euros ($3.5 million) in 2020.
Beiersdorf last April created a “Solidarity Pact for Employment” whereby it would decline government subsidies for furloughs, with executive board members waiving 20 percent of their fixed remuneration for the year. Chairman and CEO Stefan De Loecker’s total pay dropped 55.7 percent, to 2.1 million euros ($2.4 million).
With increases in compensation, Johnson & Johnson’s Alex Gorsky and Procter & Gamble’s David Taylor were exceptions to the rule — among the listed Top 100 companies that had disclosed their 2020 compensation data at press time, at least. Their significantly broader portfolios mean numbers — and salaries — aren’t necessarily comparable to the players present predominantly in beauty or luxury, however. J&J, in particular, was making headlines last year more for its involvement in vaccine development than for its beauty activity. CEO Alex Gorsky took home $29.6 million in total pay, a 16.5 percent increase year-on-year. In the fiscal year ended June 30, 2020, meanwhile, P&G chairman, president and CEO David Taylor earned a total of $22.9 million, up 11.7 percent compared with the prior-year period.
In 2019, Gorsky, Freda and Taylor were the highest paid executives among the listed companies in the Top 100 ranking. That changed in 2020, when Coty took on Sue Nabi with a base salary of 3 million euros ($3.4 million, significantly higher than her predecessor, Pierre Laubies, who had a base salary of $1.5 million before it was slashed due to the pandemic. Nabi is also set to earn 10 million shares a year, which according to Stifel analyst Mark Astrachan, that puts her total compensation over a three-year period at around or above $140 million, making her beauty’s highest paid executive.