01—Abstract
Summary
Summary of the 8-K filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
The Estée Lauder Companies Inc. disclosed in this Form 8-K filed November 1, 2024 a planned leadership transition at the top of the company.
On October 29, 2024, the Board appointed Stéphane de La Faverie, currently Executive Group President, as President and Chief Executive Officer effective January 1, 2025, and to the Board effective the same date. Fabrizio Freda will step down as President and CEO and resign from the Board at the end of the day on December 31, 2024, then serve as a Special Advisor until he retires on June 30, 2026, with a requirement to devote at least 20 percent of his time to that role. The filing also states that William P.
Lauder will step down as Executive Chairman following the Annual Meeting of Stockholders on November 8, 2024, retire as an employee on March 1, 2025, and continue as Chair of the Board. Beginning March 1, 2025, he will receive an additional annual retainer of $225,000a for serving as Chair, in addition to standard non-employee director compensation.
Compensation terms for the incoming CEO include an annual base salary of $1,500,000,b an aggregate target bonus opportunity of $3,000,000 (prorated for fiscal 2025), a one-time cash payment of $25,000, and an annual equity-award target of no less than $10,000,000. Mr. Freda's base salary ($2,100,000) and target bonus ($5,775,000) remain unchanged during his Special Advisor Period, and he will receive a fiscal 2026 equity award target with a grant-date value of $12,500,000.
02—Key points
Key Highlights
- Stéphane de La Faverie, age 50 and a company employee since January 2011, will become President and CEO and a Board member effective January 1, 2025.
- Fabrizio Freda will leave the President and CEO role and Board at the end of December 31, 2024, and serve as Special Advisor until retiring on June 30, 2026.
- William P. Lauder steps down as Executive Chairman after the November 8, 2024 Annual Meeting, retires as an employee on March 1, 2025, and continues as Board Chair.
- Mr. de La Faverie's base salary will be $1,500,000 annually, with a target bonus opportunity of $3,000,000 and an equity-award target of no less than $10,000,000.
- Mr. de La Faverie will participate in the PRGP incentive program for fiscal 2025 and 2026 at a target of 25% of his annual equity award target, up to a maximum of 50%.
- Mr. Freda's amended agreement keeps his $2,100,000 base salary and $5,775,000 target bonus unchanged during the Special Advisor Period and provides a $12,500,000 fiscal 2026 equity award target.
- Mr. Freda's amendment removes his right to terminate for good reason following a change in control and removes termination for a material breach by the Company.
03—Questions
Frequently Asked Questions
Who will lead The Estée Lauder Companies after January 1, 2025?
Stéphane de La Faverie, currently Executive Group President, will become President and Chief Executive Officer effective January 1, 2025, and will also join the Board on that date to fill the vacancy created by Mr. Freda's resignation.
What is Fabrizio Freda's role after he steps down as CEO?
Mr. Freda will serve as a Special Advisor to the Company, devoting at least 20 percent of his time, until he retires as an employee on June 30, 2026. He resigns from the Board at the end of the day on December 31, 2024.
What changes are being made to William P. Lauder's role?
Mr. Lauder will step down as Executive Chairman following the November 8, 2024 Annual Meeting and retire as an employee on March 1, 2025. He will continue to serve as Chair of the Board, receiving an additional $225,000 annual retainer for that role beginning March 1, 2025, along with non-employee director compensation and office support.
How will Mr. de La Faverie be compensated as CEO?
Effective January 1, 2025, his annual base salary will be $1,500,000 and his aggregate target bonus opportunity $3,000,000, prorated for fiscal 2025. He will receive a one-time $25,000 cash payment, an annual equity-award target of no less than $10,000,000 before individual performance adjustment, and a prorated fiscal 2025 total equity-award target grant value of $6,740,500, which includes an additional $3,259,500 grant subject to Stock Plan Subcommittee approval.
04—Continue