Is a $280M bonus too high for a female CEO? Coty shareholders to decide

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To entice Nabi to stay at her new job, Coty awarded her a signing bonus payable over three years worth $280 million.

That was too much in the eyes of some.

“Excessive,” fumed Institutional Shareholder Services, a firm that advises on boardroom and compensation matters. It said Nabi’s level of pay and the absence of performance hurdles raised “serious concerns.”

ISS added that Nabi’s bonus, which is paid in shares, doesn’t necessarily work as a retention tool. That’s because she can get paid a prorated amount if she leaves before her award fully vests in 2023.

“This risks excessive costs for the shareholders,” said ISS, which also recommended investors vote against four board members serving on Coty’s compensation committee.

Coty, which didn’t immediately respond to a request for comment, acknowledged in a September regulator filing that “some shareholders have expressed concerns regarding the alignment of pay and performance.” Its solution: “We will continue to reach out to investors and to consider the outcome of say-on-pay votes.”

Nabi’s total compensation package of $284 million, including salary, would make her the best-paid CEO of a New York-based public company. She tops the $202 million awarded last year to Joseph Levin, CEO of Barry Diller’s media conglomerate IAC/InterActive Corp. ISS also opposed Levin’s pay, but 66% of shareholders approved it in a nonbinding vote. 

Nabi, a native of Algeria, was CEO of genderless vegan skin-care brand Orveda and  president of Lanĉome. Three years ago she was named to the Top 25 list of British Vogue, along with the Duchess of Sussex and Stella McCartney. During her tenure at L’Oreal, she originated a marketing campaign with the slogan, “You’re worth it.”

“Sue is the greatest rock star in the business,” one of her predecessors at Coty told Vogue last year. 

Coty is showing signs of a revival under Nabi’s leadership. Losses narrowed to $200 million in the year ending June 30 from $1 billion in the prior year. The stock has nearly tripled in value in the past 12 months.

“Operationally, execution has improved,” Evercore ISI analyst Robert Ottenstein said in a report Wednesday.

 

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