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NEW YORK – US-based publicly held corporations are beginning to report typical pay gaps between their CEOs and typical workers for the first time in history. New Securities and Exchange Commission (SEC) regulations have now come into effect, and CEO-worker pay ratio disclosures are steadily rolling in for a number of leading apparel brands which have recently posted SEC filings.

Setting the pace in terms of the lowest ratio in apparel brands at the time of writing is Urban Outfitters, whose CEO Richard Hayne took home a remarkably modest US$41,480 in 2017, giving the business a CEO to worker pay ratio of 5:1. It is worth offering some context however: Hayne does own 15.5 per cent of the retailer’s stock, valued at US$621 million after shares.

Other apparel retailers don’t compare quite so favourably. Kohl’s has a pay ratio of 1,264 to 1, with the median worker making US$8,975 compared to the CEO pay of US$11.3m according to the company’s last SEC filing. At Burlington Coat Factory, the pay ratio is 763 to 1, with the CEO paid US$8.9m compared to a median employee salary of US$11,662. Under Armour has a pay ratio of 378 to 1, with the median employee paid US$10,686 a year. Meanwhile Sears has a pay ratio of 264 to 1, with median worker paid US$16,442.

Ratios for other major apparel retailers will become available in the coming months and are sure to make interesting reading given the pay of executives such as Steven Rendle, chairman, president and CEO of VF Corp whose total compensation last year including stock options was US$13.7m; Gap CEO, Arthur Peck, who made US$8,906,166 in total compensation, and Nike CEO Mark Parker made US$13,851,499 in total compensation last year.

Do these figures matter? We will be asking this question in the next cover story of Apparel Insider. Most notably, we will be looking at whether it is time for the apparel industry as a whole to begin linking executive pay to long term sustainability performance rather than short term financial gain.

If you have an opinion on this matter, please email the editor at brett@apparelinsider.com


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