Capri CEO John Idol Set to Get Big Payday After Tapestry Takeover
The pay is good in the C-suite.
But getting booted from the corner office — after cutting a deal for a multibillion-dollar buyout — can be even more lucrative.
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Witness John Idol, chairman and chief executive officer of Capri Holdings, who along with the board he leads, negotiated a sale to competitor Tapestry Inc. last month.
Idol is on track to receive $15.1 million in cash and $24.3 million in equity — assuming no changes to his compensation program and that the deal closes and that he leaves the company, according to a recent Capri filing with the Securities and Exchange Commission.
Altogether, that’s a $39.4 million golden parachute that’s a tad more than Idol’s target pay of $37.3 million for the last three years combined.
Big executive payouts often accompany big deals and the Tapestry takeover of Capri will create a giant with more than $12 billion in sales, bringing together Versace, Coach, Michael Kors, Kate Spade, Jimmy Choo and Stuart Weitzman.
Idol, it turns out, had a busy year also fielding interest in Versace and Jimmy Choo from “a multi-industry holding company,” an “international luxury goods company” and a “luxury fashion house.”
But none of those connections clicked and Tapestry inked a deal at $57 a share that’s set to pay out $6.7 billion to Capri’s investors and give the company an enterprise value of $8.5 billion.
Capri shareholders will vote on the deal at a special meeting on Oct. 25.
And then, if the deal passes all the regulatory hurdles and is consummated, expected some time next year, it will be Joanne Crevoiserat, CEO of Tapestry, who will need to make the whole company work together.
The groundwork for that is already being laid.
Capri employees were sent information this month about the joint Integration Management Office that’s been set up and is being led by Debbie Meyer, senior vice president of business integration at Tapestry, and Tom Edwards, executive vice president, chief financial officer and chief operating officer at Capri.
The memo laid out five principles for the integration:
Protect Employee and Customer Experience.
Do No Harm to Brand Operations.
Address the “Must Haves” First.
Be Open to Improving Operations Regardless of Where [the Ideas] Come From.
Prioritize Integration Activities Based on Value Creation.
So the wheels are already turning.
Meanwhile, a separate SEC filing laid out the pay package for Crevoiserat, who saw her compensation rise 5.5 percent to $14.5 million for fiscal 2023 — including a salary of $1.4 million, incentive pay of $2.4 million and stock and options valued at $10.7 million.
That is what is considered Crevoiserat’s target pay, tabulating the value of the stock and option awards as if they were fully vested when they were granted.
The SEC filing also lays out what the CEO’s pay was given the value of the stock and option awards at the end of the year, which boosted her total take to $21.9 million.
Tapestry shareholders have also done relatively well in recent years.
One-hundred dollars invested in Tapestry at the beginning of fiscal 2021 was worth $361.01 at the end of the most recent year on July 1 — much better than the $115.41 for an identical investment in the S&P Apparel, Accessories & Luxury Goods Index, according to the filing.
But as much as companies dutifully report their past performance to investors, Wall Street is about the present and the future and Crevoiserat and Co. have to prove they can pull off the mega takeover of Capri.
They still have something to prove as shares of Tapestry have fallen nearly 30 percent since the deal was revealed on Aug. 10.
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