DEF 14A of Interparfums Inc
Filed Aug 1, 2023 · FY20220001753926-23-000976
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
General
General The members of our board of directors are each elected with a plurality of votes cast in favor of their election for a one-year term or until their successors are elected and qualify. With the exception of Philippe Benacin, the officers are elected annually by the directors and serve at the discretion of the board of directors. There are no family relationships between executive officers or directors of our company. All ten (10) incumbent directors, Jean Madar, Philippe Benacin, Michel Atwood, Philippe Santi, Francois Heilbronn, Robert Bensoussan, Patrick Choël, Michel Dyens, Veronique Gabai-Pinsky and Gilbert Harrison were elected at our annual meeting held in September 2022. However, Messrs. Patrick Choël and Michel Dyens are not seeking reelection and stepping down from the board of directors at the 2023 annual meeting, and we are decreasing the size of our board of directors to nine (9) members. The remaining eight (8) incumbent directors, Jean Madar, Philippe Benacin, Michel Atwood, Philippe Santi, Francois Heilbronn, Robert Bensoussan, Veronique Gabai-Pinsky, and Gilbert Harrison, along with a first-time nominee, Kappauf, are all put forth as nominees for election to the board of directors. Unless authority is withheld, the proxies in the accompanying form will be voted in favor of the election of the nominees named above as directors. Although all of the nominees have indicated their willingness to serve if elected, if at the time of the meeting any nominee is unable or unwilling to serve, then the shares represented by properly executed proxies will be voted at the discretion of the person named in the proxies for another person designated by our board of directors.
Business Experience
Business Experience The following sets forth biographical information as to the business experience of each executive officer and director of our company for at least the past five years. Jean Madar Jean Madar, age 62, a Director, has been the Chairman of the Board since our Company’s inception, and is a co-founder of our Company with Mr. Philippe Benacin. From inception until December 1993, he was the President of our Company; in January 1994, he became Director General of Interparfums, SA, our Company’s subsidiary; and in January 1997, he became Chief Executive Officer of our Company. Mr. Madar was previously the managing director of Interparfums, SA, from September 1983 until June 1985. At such subsidiary, he had the responsibility of overseeing the marketing operations of its foreign distribution, including market research analysis and actual marketing campaigns. Mr. Madar graduated from The French University for Economic and Commercial Sciences (ESSEC) in 1983. We believe that Mr. Madar’s skills in guiding, leading and determining the strategic direction of our company since its inception together with Mr. Benacin, in addition to his contacts in the fragrance and cosmetic industry, render him qualified to serve as a member of our board of directors. Philippe Benacin Mr. Benacin, age 64, a Director, is President of our Company and the Chief Executive Officer of Interparfums, SA, has been the Vice Chairman of the Board since September 1991, and is a co-founder of our Company with Mr. Madar. He was elected the Executive Vice President in September 1991, Senior Vice President in April 1993, and President of the Company in January 1994. In addition, he has been the President of our Company and Chief Executive Officer of Interparfums, SA for more than the past five years. Mr. Benacin graduated from The French University for Economic and Commercial Sciences (ESSEC) in 1983. In June 2014 Mr. Benacin was elected as a member of the Supervisory Board of Vivendi, and Chairman of its Corporate Governance, Nominations and Remuneration Committee. We believe that Mr. Benacin’s skills in guiding, leading and determining the strategic direction of our company since its inception together with Mr. Madar, in addition to his contacts in the fragrance and cosmetic industry, render him qualified to serve as a member of our board of directors. Michel Atwood Mr. Atwood, age 53, became our Chief Financial Officer on September 6, 2022, succeeding Mr. Russell Greenberg, the former Chief Financial Officer, who retired on that same date. Mr. Atwood was first elected to our Board of Directors at the 2022 Annual Meeting held in September 2022. From September 2018 through March 2022 while at Estée Lauder, Mr. Atwood had strategic oversight for the fragrance category across that company and operational accountability for several of its fragrance brands. He also had senior level merger and acquisition (“M&A”) duties, including acquisition integration and brand divestitures/discontinuations. Over his nearly four years at Estée Lauder, he also drove cross-brand synergies across research and development and supply chain for the fragrance category. From February 2017 to August 2018, he was an independent consultant as an M&A advisor on multiple fragrance license acquisitions and also acted as a private investor. From 1995 to 2017, Mr. Atwood held several executive positions at Procter & Gamble (“P&G”) in France, Switzerland, Italy and Germany. His final title at P&G was Divisional CFO of Global Prestige Fragrances, leading a 90 member team, and ultimately spearheading the divestiture of that division to Coty. Earlier he was CFO Global Markets – Prestige Fragrances, a business generating over $2 billion in sales, where he headed a globally dispersed team of 60 people supporting the go-to-market organization (affiliates, Travel Retail and distributors) of the Prestige Division. Before that, he was Global Prestige Director of Strategic Planning, Licensing and Acquisition shaping and executing the overall business direction and licensing and acquisition strategy of P&G’s Global Fragrance and Premium skin and cosmetics businesses. Michel Atwood holds a master’s degree in software engineering from the Institut National des Sciences Appliquées of Lyon, and a master’s in international finance from HEC Paris, the prestigious French business school. He also earned the designation of Certified Management Accountant from the Institute of Management Accountants. He has a truly international background, working/living in France, Switzerland, the U.S., Canada, Turkey, and Italy. We believe that Mr. Atwood’s skills and experience in accounting, international tax, mergers, and acquisitions, as well as his knowledge of the fragrance industry, render him qualified to serve as a member of our board of directors. Philippe Santi Philippe Santi, age 61, and a Director since December 1999, is the Executive Vice President and Chief Financial Officer of Interparfums, SA. Mr. Santi, who is a Certified Accountant and Statutory Auditor in France, has been the Chief Financial Officer of Interparfums, SA since February 1995. Prior to February 1995, Mr. Santi was the Chief Financial Officer for Stryker France and an Audit Manager for Ernst and Young. We believe that Mr. Santi’s skills in accounting and tax, as well as his knowledge of the fragrance industry and our Company’s European operations, render him qualified to serve as a member of our board of directors. Mr. Heilbronn, age 61, a Director since 1988, an independent director and a member of the Audit Committee, Nominating Committee and the Executive Compensation and Stock Option Committee, is a graduate of Harvard Business School with a Master of Business Administration degree and is currently the managing partner of the consulting firm of M.M. Friedrich, Heilbronn & Fiszer. He was formerly employed by The Boston Consulting Group, Inc. from 1988 through 1992 as a manager. Mr. Heilbronn graduated from Institut d’ Etudes Politiques de Paris in June 1983. From 1984 to 1986, he worked as a financial analyst for Lazard Freres & Co. In addition, during 2009, Mr. Heilbronn became an Associate Professor in Business Strategy at Sciences Po, Paris, France. As the result of his business and financial acumen, as well as his experience as managing partner of a business consulting firm in the area of mergers and acquisitions of large international companies in retail, consumer goods and consumer services throughout the world, we believe Mr. Heilbronn is qualified to serve as a member of our board of directors. Robert Bensoussan Robert Bensoussan, age 65, has been a Director since March 1997, and is also an independent director. Mr. Bensoussan is the founder of Sirius Equity Consultants, a retail and branded luxury goods investment company. To date, Mr. Bensoussan remains as an investor in Hapy Sweet Bee Ltd, natural health food products, He was previously Chairman of Camaïeu, the French retail conglomerate, a board member of Celio International, the French retail conglomerate and Vivarte representing the GLG hedge fund. In the latter part of 2019, Mr. Bensoussan resigned after 6 years as the only non-North American board member of lululemon athletica Inc. Following the successful sale in 2021, Mr. Bensoussan stepped down from the board of Feelunique.com, one of Europe’s largest online beauty retailers after serving 9 years. He is a member of the Advisory Board of Pictet Bank Premium Brands Fund and sits on the board of Pronovias, the worldwide leader of wedding dresses. Yonderland, Europe’s largest premium outdoor retailer and SNS, a prominent aspirational streetwear and entertainment hub.
Business Experience
Previously Mr. Bensoussan was as director of, and had an indirect ownership interest in, J. Choo Limited until July 2011, and was CEO from 2001 to 2007, and was a member of the Board of Jimmy Choo Ltd, from 2001 to 2011, which had been a privately held luxury shoe wholesaler and retailer. We believe Mr. Bensoussan is qualified to serve as a member of our board of directors due to his business and financial acumen, as well as his experience in the retail and branded luxury goods market. Patrick Choël Mr. Choël, age 79, was appointed to the board of directors in June 2006 as an independent director, and is a member of the Audit Committee, Nominating Committee and the Executive Compensation and Stock Option Committee. Mr. Choël is a director of our majority-owned subsidiary, Interparfums, SA, a publicly held company, and Christian Dior a privately held company. For approximately 10 years, through March 2004, Mr. Choël was the President and CEO of two divisions of LVMH Moet Hennessy Louis Vuitton S.A., first Parfums Christian Dior, a leading world-wide prestige beauty/fragrances business, and later, the LVMH Perfumes and Cosmetics Division, which included such well-known brands as Parfums Christian Dior, Guerlain, and Parfums Givenchy, among others. Prior to such time, for approximately 30 years, he held various executive positions at Unilever, including President and CEO of Elida Fabergé France and President and CEO of Chesebrough Pond’s USA. Mr. Choel is stepping down from our board of directors at the 2023 annual meeting. Michel Dyens Michel Dyens, age 82 and an independent director, is the Founder, Chairman and Chief Executive Officer of Michel Dyens & Co., which he founded over 25 years ago. With headquarters in New York and Paris, Michel Dyens & Co. is a leading independent investment banking firm focused on mergers and acquisitions. Michel Dyens & Co. has vast experience in luxury goods, beauty, spirits and other premium branded consumer goods in which it has concluded numerous landmark deals. Michel Dyens & Co. has advised in such deals as the sale of the Grey Goose ultra-premium vodka brand to Bacardi, the acquisition of the luxury Swiss watchmaker Hublot by LVMH, the sale of the Harry Winston to Aber Diamond Corporation and Boucheron to Kering. Michel Dyens & Co. represented the owners of Liaigre, the luxury furniture brand, in the sale to Symphony International and Navis Capital, and Casa Dragones, the ultra-premium tequila, in the sale to BDT Partners (Byron Trott). In 2021, Michel Dyens & Co. represented the owners of Buly, the luxury French fragrance and beauty brand, in the sale to LVMH and the owners of Blissim, the French leader in beauty subscription e-commerce, and online beauty retail for an investment by Raise Investissement. In addition, he has just sold We11done, the Korean contemporary fashion and lifestyle brand, to Sequoia Capital. Michel Dyens & Co. was the exclusive advisor to Creed in the sale of the ultra-luxury fragrance company Creed BlackRock Long Term Private Capital, and represented Mr. Chin Wook Lee, the founder and CEO of Dr. Jart+, in the sale of Have & Be Co. Ltd. to The Estée Lauder Companies. Michel Dyens & Co. also advised the owner of the ultra-luxury fragrance brand By Kilian, in the sale to Estée Lauder. Michel Dyens & Co. advised the shareholders of the largest independent hair color and hair care company in Brazil, Niely Cosmeticos in the sale of the company to L’Oréal, as well as the owner of the super-premium liqueur St-Germain in the sale of the brand to Bacardi, the Colomer Group (American Crew and CND/Shellac brands) in its sale to Revlon, and Sidney Frank Importing Company in the sale of the company to Jaegermeister. Other transactions include the sale of the Essie cosmetics business to L’Oréal, the sale of TIGI (BedHead and Catwalk brands) to Unilever, the luxury hair care brand Christophe Robin to The Hut Group, the thinning hair brand NIOXIN Research Laboratories to Procter & Gamble, John Frieda Professional Hair Care and Molton Brown to the Kao Corporation, the Svedka vodka brand to Constellation Brands and Chambord liqueur to Brown-Forman. In the mission-driven field, Michel Dyens & Co. recently represented ClimateCare, a prominent UK carbon-offset business, in the sale to Averna Capital and represented the founders of Caboo Paper Products a Vancouver, Canada-based tree-free household paper products brand, for an investment by sustainability-focused venture capital firm Renewal Funds. Among other recent transactions, Michel Dyens & Co. recently represented the Fairtrade and organic coffee brand Ethical Bean Coffee in the sale to Kraft Heinz, and as well as Alter Eco Americas, a leading organic chocolate brand, which we sold to NextWorld Evergreen. In healthy and premium food, Michel Dyens & Co. represented the Fairtrade and organic coffee brand Ethical Bean Coffee in the sale to Kraft Heinz, and as well as Alter Eco Americas, a leading organic chocolate brand, which it sold to NextWorld Evergreen. From April 2004 to September 2014, Mr. Dyens was an independent director of Interparfums, SA. Mr. Dyens is stepping down from our board of directors at the 2023 annual meeting. Ms. Gabai-Pinsky, age 57, was elected for the first time to our board in September 2017. She became a director of Interparfums, SA in April 2017. She is currently operating a startup specialty fragrance business, and a director of Lifetime Brands (Nasdaq: LCUT), which is in the home goods business. She was President of Vera Wang Group from January 2016 through June 2018, after a year of consulting with the company and she oversaw all product categories and markets. Prior to joining Vera Wang, from 2006 to December 2014, Ms. Gabai-Pinsky was the Global President for Aramis and Designers Fragrances as well as Beauty Bank and Idea Bank at The Estée Lauder Companies, reporting to the Chief Executive Officer of such company. During her tenure, Ms. Gabai-Pinsky developed and ensured the growth of several beauty and skin care brands, including Lab Series for Men. She was highly instrumental in the evolution of the fragrance category for such company, as she improved its overall business model, globally grew brands such as Donna Karan and Michael Kors, evolved and harmonized the portfolio, divested dilutive brands and brought in Tory Burch, Zegna and Marni under licenses. She ultimately actively participated in the acquisitions of Le Labo, Frederic Malle, and By Kilian and assisted in the transformation of the long-term strategic direction of such company. In the earlier years of her career, Ms. Gabai-Pinsky served as Vice President of Marketing and Communication for Guerlain, a division of LVMH Moet Hennessy Louis Vuitton S.A., where she led the successful re-launch of Shalimar, the introduction of Aqua Allegoria, and contributed to the re-focus of the beauty category around its pillars, Terracotta, Meteorites and Issima, while redesigning all communication strategies and content. She started her career at L’Oréal, and was also Vice President of Marketing for Giorgio Armani, where she was instrumental in the overall development of its fragrance business by developing the successful Acqua di Gio for men and introducing the Emporio Armani franchise. A graduate from ESSEC Business School in Paris, France, she has received several awards, including Marketer of the Year by Women’s Wear Daily in December 2013. Ms. Gabai-Pinksy is an independent director, and is a member of the Audit Committee, Executive Compensation and Stock Option Committee and the Nominating Committee of our Company. We believe Ms. Gabi-Pinsky is qualified to serve as a member of our board of directors due to her more than 25 years of experience in the luxury, fashion, beauty and fragrance fields, success as a brand builder, creative thinker, business acumen, and a broad understanding of consumers, brands and business models. Gilbert Harrison
Business Experience
Mr. Harrison, age 82, an independent director, was appointed to our board in April 2018. Mr. Harrison has more than 50 years of experience in corporate finance and strategic transactions, specializing in the consumer products space. He began his career in 1965 practicing corporate and securities law in New York and Philadelphia. In 1971 he founded Financo, which he grew to become one of the leading independent middle market transaction firms in the country. In 1985, Financo was acquired by Lehman Brothers, where the firm’s primary efforts were focused on increasing its expertise in retail, apparel and other merchandising transactions of all types. At Lehman, Mr. Harrison was Chairman of the Merchandising Group and on the firm’s Investment Banking Operating Committee while continuing as Chairman of Financo, which was renamed the Middle Market Group of Lehman. In 1989, he re-acquired Financo from Lehman, re-establishing Financo as one of the leading investment banking firms handling transactions and providing strategic advice in connection with merchandising companies. Mr. Harrison retired as Chairman of Financo in December of 2017, after which he formed the Harrison Group, a firm that provides consulting and financial advisory services to merchandising and products companies. Mr. Harrison’s other activities include his membership on the Advisory Council of the World Retail Congress, Shoptalk and the Financial Times Business of Luxury Summit. Additionally, he has created a course on mergers and acquisitions at The Wharton School and has published various articles and academic studies on the state of retailing and mergers and acquisitions, including a chapter in the book entitled, “The Mergers and Acquisitions Handbook.” Mr. Harrison lectures throughout the country, including chairing seminars for Retail Week as well as for the International Council of Shopping Centers, the National Retail Federation, Young President’s Center, The Wharton Aresty Institute of Executive Education and The President’s Association of the American Management Association. He also appears frequently on Bloomberg TV and CNBC as an expert on retail and apparel. Mr. Harrison received a Bachelor of Science in Economics from The Wharton School of The University of Pennsylvania in 1962 and his Juris Doctor from The University of Pennsylvania Law School in 1965. He is also Chairman of the Fashion Division of UJA, Treasurer and a Board member of the Southampton Hospital, Director of the Peggy Guggenheim Collection, and former Board member of the Wharton School of the University of Pennsylvania. We believe Mr. Harrison is qualified to serve as a member of our board of directors due to his tremendous depth and breadth of knowledge about the merchandising and consumer industry, and he has a long track record of facilitating value-creating transactions for companies in this sector. Mr. Harrison’s autobiography, Deal Junky, was published in January 2022. Kappauf Gerard Kappauf (“Kappauf”), age 61, a director nominee, was born in Madagascar. After studying Classic Literature at the Sorbonne in Paris, he attended the San Francisco Art Institute on a scholarship and worked as a special effects make-up artist in Los Angeles. Upon traveling to Paris, Kappauf became interested in fashion and worked at a Jean Paul Gaultier fashion show. Thanks to this experience, he began to expand his network by meeting emblematic figures in the industry such as Paco Rabanne. While providing marketing and acquisition consulting services to L’Oréal Group during the tenure of Lindsay Owen Jones as its Chairman, in a bid for independence and emancipation he founded his own magazine in 1992, Citizen K. Through Citizen K, he realized his ambition to launch a major magazine for a wide audience on fashion, luxury, culture, and the art of living, truly different from the magazines already in existence. Citizen K magazine then became Citizen K International in 2012, a benchmark in fashion, luxury, and lifestyle. Kappauf expanded the magazine’s offering with the launch of Citizen K Homme in 2013, and 2014 was the year of change for Citizen K International with a new format and a fresh look. In 2016 Kappauf’s launched Citizen K Arabia. This title, distributed in the Middle East, benefits from editorial development and format adapted to the market. Although 80% of Citizen K International’s editorial content is contained in Citizen K Arabia, this magazine still features 20% of content tailored to The Emirates and the Middle East. In 2021, Kappauf launched The Kurator, the first a-gender magazine in the Middle East, as a luxury supplement to Gulf News, the leading daily newspaper in the region. Founded in January 1992 by Kappauf, he has been the Chief Executive Officer, and Creative and Editorial Director of the K Groupe since inception, which owns Citizen K magazines in Paris, as well as Enkore Studio in Dubai. Enkore Studio specializes in visual brand identity, digital content, storytelling and concept development for the fashion, luxury, beauty, and lifestyle industries. Kappauf now lives in Dubai and is currently working on projects in India. We believe that Kappauf’s perspective on fashion, luxury, culture, and the art of living will bring diversity of viewpoints to our Board of Directors. Nasdaq Board Diversity As required by the Nasdaq Diversity Rule, the board of directors of our company presently has one (1) member who self-identifies as female, one (1) member who identifies as Hispanic, which complies with the Nasdaq Board Diversity rule. Below is the Nasdaq Board Diversity Matrix, which shows the gender identity and demographic background of our board of directors as they have self-identified. To see our Board Diversity Matrix as of July 2022, please see the proxy statement filed with the SEC on July 22, 2022.
Business Experience
| Board Diversity Matrix for INTER PARFUMS INC. As of July 18, 2023 | | | | | | Total Number of Directors | 10 | | | | | Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 1 | 9 | 0 | 0 | | Part II: Demographic Background | | | | | | African American or Black | 0 | 0 | 0 | 0 | | Alaskan Native or American Indian | 0 | 0 | 0 | 0 | | Asian | 0 | 0 | 0 | 0 | | Hispanic or Latinx | 0 | 1 | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | | White | 1 | 8 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | | | | | Did Not Disclose Demographic Background | 0 | | | |
Business Experience
THE BOARD RECOMMENDS VOTING “FOR” EACH OF THE BOARD’S NOMINEES ON PROPOSAL No. 1.
Executive Officers and Directors
Executive Officers and Directors As of the date of this proxy statement our executive officers and directors were as follows:
Executive Officers and Directors
| Name | Position | | Jean Madar | Chairman of the Board, Chief Executive Officer of Inter Parfums, Inc. and Director General of Interparfums, SA | | Philippe Benacin | Vice Chairman of the Board, President of Inter Parfums, Inc. and Chief Executive Officer of Interparfums, SA | | Michel Atwood | Director and Chief Financial Officer | | Philippe Santi | Director, Executive Vice President and Chief Financial Officer, Interparfums, SA | | François Heilbronn | Director | | Robert Bensoussan | Director | | Patrick Choël | Director | | Michel Dyens | Director | | Veronique Gabai-Pinsky | Director | | Gilbert Harrison | Director | | Frederic Garcia-Pelayo | Executive Vice President and Chief Operating Officer of Interparfums, SA |
Executive Officers and Directors
Our directors will serve until the next annual meeting of stockholders and thereafter until their successors shall have been elected and qualified. Messrs. Jean Madar and Philippe Benacin have a verbal agreement or understanding to vote their shares and the shares of their respective holding companies in a like manner. With the exception of Mr. Benacin, the officers are elected annually by the directors and serve at the discretion of the board of directors. There are no family relationships between executive officers or directors of our Company.
Board of Directors
Board of Directors Our board of directors has the responsibility for establishing broad corporate policies and for the overall performance of our Company. Although certain directors are not involved in day-to-day operating details, members of the board of directors are kept informed of our business by various reports and documents made available to them. Our board of directors held 18 meetings (or executed consents in lieu thereof), including meetings of committees of the full board of directors during 2022, and all of the directors attended at least 75% of the meetings (or executed consents in lieu thereof) of the full board of directors and committees of which they were a member. Our board of directors presently consists of ten (10) directors. We have adopted a Code of Business Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, as well as other persons performing similar functions, and we agree to provide to any person without charge, upon request, a copy of our Code of Business Conduct. Any person who requests a copy of our Code of Business Conduct should provide their name and address in writing to: Inter Parfums, Inc., 551 Fifth Avenue, New York, NY 10176, Att.: Shareholder Relations. In addition, our Code of Conduct is also maintained on our website, at www.interparfumsinc.com. During 2022, our board of directors had the following standing committees:
Board of Directors
| ● | Audit Committee – The Audit Committee has the sole authority and is directly responsible for, the appointment, compensation and oversight of the work of the independent auditor employed by our company which prepare or issue audit reports for our company. During 2022, this committee consisted of Messrs. Heilbronn and Choël, and Ms. Gabai-Pinsky. The charter of the Audit Committee is posted on our Company’s website. Following the election of directors at the 2023 annual meeting, Robert Bensoussan will replace Mr. Choël on the Audit Committee. |
Board of Directors
The Company does not have an “audit committee financial expert” within the definition of the applicable Securities and Exchange Commission rules. Finding qualified nominees to serve as a director of a public company without the comparable financial resources of other larger, more established companies has been challenging. In addition, despite the applicable Securities and Exchange Commission rule which states that being named as the audit committee financial expert does not impose any greater duty, obligation or liability, our company has been met with resistance from both present and former directors to being named as such, primarily due to potential additional personal liability. However, as the result of the background, education and experience of the members of the Audit Committee, our board of directors believes that such committee members are fully qualified to fulfill their obligations as members of the Audit Committee. The Chair of the Audit Committee, Mr. François Heilbronn, is a graduate of Harvard Business School with a Master of Business Administration degree and is currently the managing partner of the consulting firm of M.M. Friedrich, Heilbronn & Fiszer which is specialized in business strategy and complex financial operations and investments.
Board of Directors
| ● | Executive Compensation and Stock Option Committee – The Executive Compensation and Stock Option Committee oversees the compensation of our Company’s executives and administers our company’s stock option plans. During 2022, this committee consisted of Messrs. Heilbronn and Choël, and Ms. Gabai-Pinsky. Following the election of directors at the 2023 annual meeting, Robert Bensoussan will replace Mr. Choël on the Executive Compensation and Stock Option Committee. |
Board of Directors
| ● | Nominating Committee – During 2022, this committee consisted of Messrs. Heilbronn and Choël, and Ms. Gabai-Pinsky. The purpose of the Nominating Committee is to determine and recommend qualified persons to the Board of Directors who will be put forth as management’s slate of directors for vote of the Corporation’s stockholders, as well as to fill vacancies in the Board of Directors. The charter of the Nominating Committee is posted on our Company’s website. Following the election of directors at the 2023 annual meeting, Robert Bensoussan will replace Mr. Choël on the Nominating Committee. |
Board of Directors
We have adopted a board diversity policy, which provides that the selection of candidates for appointment to our board will be based on an overriding emphasis on merit, but the Nominating Committee will seek to fill board vacancies by considering candidates that bring a diversity of background and industry or related expertise to our board. The Nominating Committee is to consider an appropriate level of diversity having regard for factors such as skills, business and other experience, education, gender, age, ethnicity and geographic location. A copy of the board diversity policy is posted on our company’s website. In addition, Nasdaq has adopted a Board Diversity Rule, which requires Nasdaq listed companies to publicly disclose board-level diversity statistics using a standardized template. By the 2025 annual meeting, we will be required to disclose whether or not we have two directors that are diverse under the applicable Nasdaq rule, and if not, then why not. We do not foresee any issue in complying with Nasdaq Board Diversity Rule at this time.
Compensation Discussion and Analysis
Mr. Atwood, who became the Chief Financial Officer in September 2022 after the retirement of Mr. Greenberg, was granted a $500,000 annual base salary, as well as a signing bonus of $100,000 that was paid in September 2022. An additional pro-rated bonus of $50,000 was also paid in December 2022 for the September-December period. The Compensation Committee considered the following material factors in approving the base salary and guaranteed annual bonus of Mr. Atwood for 2022: his individual performances, level of responsibilities, skill and experience with other companies in the fragrance and cosmetic industry, as well as the recommendation of the Chief Executive Officer. Bonus Compensation/Annual Incentives In recognition of the Company’s turnaround from the effects of the COVID-19 pandemic, supply chain disruptions and geopolitical turmoil in 2022 and record results in 2022, and after the recommendations of Messrs. Madar and Benacin, the compensation committee determined that Mr. Benacin receive a bonus of $211,000. Also, in recognition of record results in 2021 while dealing with the effects of the COVID-19 pandemic, supply chain disruptions and geopolitical turmoil, and after the recommendations of Messrs. Madar and Benacin, the compensation committee determined that Mr. Benacin receive a bonus of $166,000. For 2020 Mr. Benacin, the chief decision maker for European operations, proposed and the compensation committee concurred in the payment of discretionary bonus compensation of $131,000. Discretionary bonus compensation for Mr. Benacin has been approximately 28%, 30% and 17% of his base salary in 2022, 2021 and 2020, respectively. In addition, the Compensation Committee agreed with the recommendation of Mr. Benacin and the contributions made by Messrs. Santi and Garcia-Pelayo to the Company’s success and growth. Bonus compensation for Messrs. Santi and Garcia-Pelayo have remained in lockstep, and each was awarded a discretionary bonus of $437,000, $378,000 and $296,000 in 2022, 2021 and 2020, respectively, or 96%, 78% and 63%of their base salary for those years. A different approach is taken for United States operations as that segment is smaller and less profitable. As discussed above, a more significant base salary is paid in order to attract and retain employees with the skills and talents needed to run United States operations with a lesser emphasis placed on bonuses. In 2022, as Mr. Greenberg retired, he did not receive a discretionary bonus. In 2021, although Mr. Greenberg did not receive any increase in base salary due to the continuing impact of the COVID-19 pandemic, he did receive a discretionary bonus of $70,000 based upon the recommendation of the Chief Executive Officer. Mr. Greenberg was paid a discretionary bonus of $35,000 in 2020 and $50,000 for each of the several years prior thereto. The Compensation Committee considered the following material factors in granting Mr. Greenberg his bonuses: his individual performance, level of responsibility, skill and experience, as well as the recommendation of the Chief Executive Officer. Mr. Atwood, who became the Chief Financial Officer in September 2022 after the retirement of Mr. Greenberg, received a sign on bonus of $100,000. His compensation arrangement also entitles him to a guaranteed annual bonus of $100,000, as well as a $100,000 bonus based upon achieving certain milestones. For 2022, Mr. Atwood received his $100,000 sign on bonus and $50,000 pro-rated performance bonus related to the September-December period. The Compensation Committee considered the same factor in granting these two bonuses as in approving his initial annualized salary. Mr. Madar, the Chief Executive Officer has not received any cash bonus in the past three years. As required by French law, Interparfums, SA maintains its own profit sharing plan for all French employees who have completed three months of service, including executive officers of our European operations other than Mr. Benacin, the Chief Executive Officer of Interparfums, SA. Benefits are calculated based upon a percentage of taxable income of Interparfums, SA and allocated to employees based upon salary. The maximum amount payable per year per employee is approximately $32,485. Calculation of the total annual benefits contribution is made according to the following formula: 67% of (Interparfums, SA net income, less 2.5% of shareholders’ equity without net income for the year) times a fraction, the numerator of which is wages, and the denominator of which is net income before tax + wages + taxes (other than income tax) + valuation allowances + amortization expenses + interest expenses. Contribution to individual employees is then made pro rata based upon their individual salaries for the year. Long-Term Incentives Stock Options. In prior years, we had linked long-term incentives with corporate performance through the grant of stock options. However, no options were granted in 2021 or 2020 to either employees of United States operations or European operations, as other compensation arrangements were being considered as part of a review of the executive compensation strategy. In December 2022, at the recommendation of the Chief Executive Officer, the Compensation Committee authorized the grant of a stock option to purchase 5,000 shares to Mr. Atwood at the fair market value on the date of grant as part of his long-term incentives. Unless the market price of our common stock increases, Mr. Atwood will have no tangible benefit from this option. Thus, the option holder is provided with the additional incentive to increase individual performance with the ultimate goal of increasing our overall performance. We believe that enhanced executive incentives that result in increased corporate performance tend to build company loyalty. No other stock option grants were made to other executive officers in 2022, including Messrs. Jean Madar and Philippe Benacin. Interparfums, SA Stock Compensation Plans 2022 Free Share Plan – On March 16, 2022, the Board of Interparfums, SA (“IPSA”) decided to grant 88,400 free shares of its capital stock to all of the IPSA’s employees and corporate officers having more than 6 months seniority at the grant date. The free shares are to be issued in June 2025. Issuance of those shares are based on satisfaction of performance conditions, relating to the 2024 IPSA sales for 50% of the shares and 2024 operating income for the balance. IPSA used the services of third party to assist them in the valuation of the plan, with the calculations and assumptions as follows: Management expects the rate of staff turnover to be 12%, Using the Monte Carlo method, management expects the performance rate to be 80% on the consolidated sales and 80.8% on the consolidated operating income. Based on the above assumptions, the total expenses related to this plan is valued at $3.3 million. As of December 31, 2022: 63,281 shares of IPSA Capital Stock, representing $3.0 million were purchased in the open market and allocated to this plan. $1.0 million of expenses was recorded (or $1.2 million including social contributions). 2019 Plan – In December 2018, Interparfums, SA approved a plan to grant an aggregate of 26,600 shares of its stock to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions. The shares, subject to adjustment for stock splits, were distributed in June 2022. Under this plan in June 2022, Messrs. Benacin, Madar, Garcia-Pelayo and Santi received 4,000 shares each (5,857 shares as adjusted for stock splits).
Compensation Discussion and Analysis
In June 2020, the performance conditions were modified effecting 96 employees. As of December 31, 2021, the number of shares to be distributed, after forfeited shares and adjusted for stock splits, increased to 172,343. The increase in shares anticipated to be distributed were transferred from treasury shares at the Interparfums, SA level. The modification resulted in a revised cost of the grant to approximately $4.6 million. In connection with the 2019 Plan referred to above, an incentive plan was established by Interparfums, SA for certain employees of Interparfums Luxury Brands, Inc. (“IPLB”), Interparfums Singapore (“IP Singapore”) and Inter Parfums, Inc. The proposed incentive plan would not provide shares but rather, would give a cash payment or bonus (“incentive” or “award”) that mirrors the shares that Interparfums, SA employees will receive. An aggregate of 42,140 “phantom” shares have been awarded in 2022, with Mr. Greenberg being awarded 1,000 of such “phantom” shares, all subject to adjustment for stock splits, with a value of approximately $69,839. Stock Appreciation Rights Our stock option plans authorize us to grant stock appreciation rights, or SARs. A SAR represents a right to receive the appreciation in value, if any, of our common stock over the base value of the SAR. To date, we have not granted any SARs under our plans. While the compensation committee currently does not plan to grant any SARs under our plans, it may choose to do so in the future as part of a review of the executive compensation strategy. Restricted Stock We have not in the past, and we do not have any future plans to grant restricted stock to our executive officers. However, while the compensation committee currently does not plan to authorize any restricted stock plans, the compensation committee may choose to do so in the future as part of a review of the executive compensation strategy. Our French operating subsidiary, Interparfums, SA, however, has instituted its 2022 and 2019 Stock Compensation Plans as discussed above. Other Compensation For 2022, each of Messrs. Benacin and Garcia-Pelayo received an automobile allowance of $11,372. No Stock Ownership Guidelines We do not require any minimum level of stock ownership by any of our executive officers. As stated above, Messrs. Madar and Benacin, are our largest beneficial shareholders, which aligns their interests with our shareholder base in keeping executive compensation at a reasonable level. Retirement and Pension Plans We maintain a 401(k) plan for United States operations. Commencing in October 2021 we started matching the first $6,000 of contribution for each employee, as we have determined that base compensation together with annual bonuses, are sufficient incentives to retain talented employees. Our European operations maintain a pension plan for its employees as required by French law. For each of 2022, 2021 and 2020, each of Messrs. Benacin, Santi and Garcia-Pelayo received an increase of $16,006, $17,773 and $17,500, respectively, in their value of deferred compensation earnings.
Compensation Committee Report
| SUMMARY COMPENSATION TABLE | | | | | | | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(3) | Total ($) | | Jean Madar, | 2022 | 1,230,000 | -0- | 139,077 | -0- | -0- | -0- | -0- | 1,369,077 | | Chairman and | 2021 | 1,230,000 | -0- | -0- | -0- | -0- | -0- | -0- | 1,230,000 | | Chief Executive Officer | 2020 | 1,230,000 | -0- | 157,603 | -0- | -0- | -0- | -0- | 1,387,603 | | Russell Greenberg, (4) | 2022 | 750,000 | -0- | -0- | -0- | -0- | -0- | -0- | 750,000 | | Chief Financial Officer and | 2021 | 720,000 | 70,000 | -0- | -0- | -0- | -0- | -0- | 790,000 | | Executive Vice President | 2020 | 720,000 | 35,000 | -0- | -0- | -0- | -0- | -0- | 755,000 | | Michel Atwood (5) | 2022 | 161,218 | 150,000 | -0- | 101,814 | -0- | -0- | -0- | 413,032 | | Chief Financial Officer | | | | | | | | | | | Philippe Benacin, President Inter | 2022 | 755,440 | 210,600 | 139,077 | -0- | -0- | 16,006 | 11,372 | 1,132,495 | | Parfums, Inc., Chief Executive | 2021 | 803,504 | 165,578 | -0- | -0- | -0- | 17,733 | 12,774 | 999,589 | | Officer of Interparfums SA | 2020 | 788,808 | 130,673 | 157,603 | -0- | -0- | 17,500 | 12,434 | 1,107,018 | | Philippe Santi, Executive Vice | 2022 | 454,896 | 436,995 | 139,077 | -0- | 32,485 | 16,006 | -0- | 1,079,459 | | President and Chief Financial | 2021 | 482,542 | 378,464 | -0- | -0- | 34,940 | 17,733 | -0- | 913,679 | | Officer, Interparfums SA | 2020 | 469,730 | 295,596 | 315,205 | -0- | 38,000 | 17,500 | -0- | 1,136,031 | | Frédéric Garcia-Pelayo, | 2022 | 454,896 | 436,995 | 139,077 | -0- | 32,485 | 16,006 | 11,372 | 1,090,831 | | Executive Vice President and | 2021 | 482,542 | 378,464 | -0- | -0- | 34,940 | 17,733 | 12,774 | 926,453 | | Chief Operating Officer Interparfums SA | 2020 | 469,730 | 295,596 | 315,205 | -0- | 38,000 | 17,500 | 8,980 | 1,145,011 |
Plan Based Awards
| | | Grants of Plan-Based Awards | | | | | | | | | | | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Closing | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (#) | Options (#) | Awards ($/Sh) | Price ($/Sh) | | Jean Madar | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA | | Russell Greenberg | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA | | Michel Atwood | 07/22/ 2022 | 100,000 | 100,000 | 100,000 | -0- | -0- | -0- | - 0- | -0- | NA | NA | | Michel Atwood | 12/30 /202 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | 5,000 | $97.84 | $96.52 | | Philippe Benacin | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA | | Philippe Santi | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA | | Frédéric Garcia-Pelayo | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA |
Plan Based Awards
| | | Grants of Plan-Based Awards | | | | | | | | | | | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Closing | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (#) | Options (#) | Awards ($/Sh) | Price ($/Sh) | | Jean Madar | 3/16/22 | NA | NA | NA | -0- | -0- | -0- | 3,000 | -0- | -0- | 49,89 € | | Russell Greenberg | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA | | Michel Atwood | NA | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | NA | NA | | Philippe Benacin | 3/16/22 | NA | NA | NA | -0- | -0- | -0- | 3,000 | -0- | NA | NA | | Philippe Santi | 3/16/22 | NA | NA | NA | -0- | -0- | -0- | 6,000 | -0- | -0- | 49,89 € | | Philippe Santi | 12/31/22 | NA | NA | 32,485 | -0- | -0- | -0- | -0- | -0- | NA | NA | | Frédéric Garcia-Pelayo | 3/16/22 | NA | NA | NA | -0- | -0- | -0- | 6,000 | -0- | | 49,89 € | | Frédéric Garcia-Pelayo | 12/31/22 | NA | NA | 32,485 | -0- | -0- | -0- | -0- | -0- | NA | NA |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information relating to outstanding equity awards of our Company held by the executive officers listed in the Summary Compensation Table as of December 31, 2022.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | | Jean Madar | 25,000(2) | 0(2) | 0 | 43.80 | 12/29/23 | | | 20,000(2) | 5,000(2) | 0 | 65.25 | 12/30/24 | | | 15,000(2) | 10,000(2) | 0 | 73.09 | 12/30/25 | | Russell Greenberg | | | | | | | | 15,000 | 0 | 0 | 43.80 | 12/29/23 | | | 5,000 | 5,000 | 0 | 65.25 | 12/30/24 | | | 5,000 | 10,000 | 0 | 73.09 | 12/30/25 | | Michel Atwood | 0 | 5,000 | 0 | 97.84 | 12/30/28 | | Philippe Benacin | 25,000(2) | 0(2) | 0 | 43.80 | 12/29/23 | | | 20,000(2) | 5,000(2) | 0 | 65.25 | 12/30/24 | | | 15,000(2) | 10,000(2) | 0 | 73.09 | 12/30/25 | | Philippe Santi | 1,200 | 0 | 0 | 43.80 | 12/29/23 | | | 800 | 800 | 0 | 46.903 | 1/18/24 | | | 2,400 | 2,000 | 0 | 65.25 | 12/30/24 | | | 4,000 | 4,000 | 0 | 73.09 | 12/30/25 | | Frédéric Garcia-Pelayo | 2,400 | 0 | 0 | 43.80 | 12/29/23 | | | 800 | 800 | 0 | 46.903 | 1/18/24 | | | 4,000 | 2,000 | 0 | 65.25 | 12/30/24 | | | 4,000 | 4,000 | 0 | 73.09 | 12/30/25 |
Outstanding Equity Awards at Fiscal Year-End
| 1 | All options expire 6 years from the date of grant, and vest 20% each year commencing one year after the date of grant. |
Outstanding Equity Awards at Fiscal Year-End
| 2 | Options are held in the name of personal holding company. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets certain information relating to outstanding equity awards granted by Interparfums, SA, our majority-owned French subsidiary which has its shares traded on the NYSE Euronext, held by the executive officers of our company listed in the Summary Compensation Table as of the end of the past fiscal year.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF INTERPARFUMS, SA
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF INTERPARFUMS, SA
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF INTERPARFUMS, SA
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#)(1) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested($) | | Jean Madar | -0- | 0 | -0- | NA | NA | 3,000 | 175,640 | -0- | -0- | | Russell Greenberg | -0- | 0 | -0- | NA | NA | -0- | -0- | -0- | -0- | | Michel | | | | | | | | | | | Atwood | -0- | 0 | -0- | NA | NA | -0- | -0- | -0- | -0- | | Philippe Benacin | -0- | 0 | -0- | NA | NA | 3,000 | 175,640 | -0- | -0- | | Philippe Santi | -0- | 0 | -0- | NA | NA | 6,000 | 351,281 | -0- | -0- | | Frédéric Garcia-Pelayo | -0- | 0 | -0- | NA | NA | 6,000 | 175,640 | -0- | -0- |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OF INTERPARFUMS, SA
1 Estimated number of shares are to be issued only to the extent that the performance conditions have been met. 2 As of December 31, 2022, the closing price of Interparfums, SA as reported by Euronext was 55.60 euros, and the exchange rate was 1.053 U.S. dollars to 1 euro.
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth certain information relating to each option exercise affected during the past fiscal year, and each vesting of stock, including restricted stock, restricted stock units and similar instruments of our company during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized On Vesting ($) | | Jean Madar | 19,000 | 1,230,315 | -0- | -0- | | Russell Greenberg | 60,000 | 2,475,744 | -0- | -0- | | Michel Atwood | -0- | -0- | -0- | -0- | | Philippe Benacin | 19,000 | 1,191,374 | -0- | -0- | | Philippe Santi | 4,000 | 199,588 | -0- | -0- | | Frédéric Garcia-Pelayo | 1,200 | 82,973 | -0- | -0- |
OPTION EXERCISES AND STOCK VESTED
[Footnotes from table above]
OPTION EXERCISES AND STOCK VESTED
| 1 | Total value realized on exercise of options in dollars is based upon the difference between the fair market value of the common stock on the date of exercise, and the exercise price of the option. |
OPTION EXERCISES AND STOCK VESTED
Regarding Interparfums, SA, our majority-owned French subsidiary which has its shares traded on the Euronext, no options were exercised during the past fiscal year, and there was no vesting of stock, including restricted stock, restricted stock units and similar instruments during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table.
Pension Benefits
Pension Benefits The following table sets forth certain information relating to payment of benefits in connection with retirement plans during the past fiscal year, for the executive officers of our company listed in the Summary Compensation Table.
PENSION BENEFITS
PENSION BENEFITS
PENSION BENEFITS
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit* ($) | Payments During Last Fiscal Year ($) | | Jean Madar | NA | NA | -0- | -0- | | Russell Greenberg | NA | NA | -0- | -0- | | Michel Atwood | NA | NA | -0- | -0- | | Philippe Benacin | Interparfums SA Pension Plan | NA | 331,239 | 16,006 | | Philippe Santi | Interparfums SA Pension Plan | NA | 321,239 | 16,006 | | Frédéric Garcia-Pelayo | Interparfums SA Pension Plan | NA | 321,239 | 16,006 |
PENSION BENEFITS
| * Does not include any contributions made by prior employers, or individually by the recipients as such information is confidential under French law. |
PENSION BENEFITS
Interparfums SA maintains a pension plan for all of its employees, including all executive officers. The calculation of commitments for severance benefits involves estimating the probable present value of projected benefit obligations. This projected benefit obligations are then prorated to take into account seniority of the employees of Interparfums, SA on the calculation date. In calculating benefits, the following assumptions were applied:
PENSION BENEFITS
| - | voluntary retirement at age 65; |
PENSION BENEFITS
| - | a rate of 45% for employer payroll contributions for all employees; |
PENSION BENEFITS
| - | a 3% average annual salary increase; |
PENSION BENEFITS
| - | an annual rate of turnover for all employees under 55 years of age and nil above; |
PENSION BENEFITS
| - | the TH 00-02 mortality table for men and the TF 00-02 mortality table for women; |
PENSION BENEFITS
| - | a discount rate of 3.8%. |
PENSION BENEFITS
The normal retirement age is 65 years, but employees, including Messrs. Benacin, Santi and Garcia-Pelayo, can collect reduced benefits if they retire at age 62.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans.
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our mean employee and the annual total compensation of Mr. Jean Madar, Chief Executive Officer (the “CEO”): For 2022, our last completed fiscal year:
CEO Pay Ratio
| ● | Our median employee’s compensation was $66,402 |
CEO Pay Ratio
| ● | Our Chief Executive Officer’s total 2022 compensation was $2,460,315 |
CEO Pay Ratio
| ● | Accordingly, our 2022 CEO to Median Employee Pay Ratio was 37.05 to 1 |
CEO Pay Ratio
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records. We identified our median employee using our total employee population as of December 31, 2022 by applying a consistently applied compensation measure across our global employee population. For our consistently applied compensation measure, we used all compensation, including actual base salary, bonuses, commissions, and any overtime paid during the 12-month period ending December 31, 2022. We did not use any material estimates, assumptions, adjustments, or statistical sampling to determine the worldwide median employee. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Compensation of Directors
Compensation of Directors The following table sets forth certain information relating to the compensation for each of our directors who is not an executive officer of our Company named in the Summary Compensation Table for the past fiscal year.
Compensation of Directors
| | | | DIRECTOR COMPENSATION | | | | | | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($)(1) | Total ($) | | Francois Heilbronn(2) | 15,000 | -0- | 30,544 | -0- | -0- | -0- | 45,544 | | Robert Bensoussan(3) | 18,000 | -0- | 30,544 | -0- | -0- | 66,480 | 115,024 | | Patrick Choël(4) | 15,000 | -0- | 30,544 | -0- | -0- | 13,246 | 58,790 | | Michel Dyens(5) | 21,000 | -0- | 30,544 | -0- | -0- | -0- | 51,544 | | Veronique Gabai-Pinsky(6) | 18,000 | -0- | 30,544 | -0- | -0- | 84,308 | 132,852 | | Gilbert Harrison(7) | 18,000 | -0- | 30,544 | -0- | -0- | 120,000 | 168,544 |
Compensation of Directors
[Footnotes from table above]
Compensation of Directors
| 1. | Represents gain from exercise of stock options, except for Mr. Harrison, which consists of a $120,000 payment made in 2022 to the company controlled by Mr. Harrison in connection with the acquisition of the Donna Karan license. See “Fee for Director’s Company” in Item 13, Certain Relationships and Related Transactions, and Director Independence, in this annual report on Form 10-K. |
Compensation of Directors
| 2. | As of the end of the last fiscal year, Mr. Heilbronn held options to purchase an aggregate of 6,500 shares of our common stock. |
Compensation of Directors
| 3. | As of the end of the last fiscal year, Mr. Bensoussan held options to purchase an aggregate of 7,500 shares of our common stock. |
Compensation of Directors
| 4. | As of the end of the last fiscal year, Mr. Choël held options to purchase an aggregate of 5,750 shares of our common stock. |
Compensation of Directors
| 5. | As of the end of the last fiscal year, Mr. Dyens held options to purchase an aggregate of 6,500 shares of our common stock. |
Compensation of Directors
| 6. | As of the end of the last fiscal year, Ms. Gabai-Pinsky held options to purchase an aggregate of 7,500 shares of our common stock. |
Compensation of Directors
| 7. | As of the end of the last fiscal year, Mr. Harrison held options to purchase an aggregate of 7,500 shares of our common stock. |
Compensation of Directors
All nonemployee directors receive $6,000 for each board meeting at which they participate in person, and $3,000 for each meeting held by conference telephone. In addition, the annual fee for each member of the audit committee is $8,000. The compensation for the nonemployee directors remained the same for 2021 and 2022, except for Mr. Harrison. During 2021, a company owned by Mr. Harrison received a fee equal to $300,000, in connection with the Donna Karan license agreement, which is effective on July 1, 2022. A payment of $120,000 was made in 2021 to Mr. Harrison’s company, $120,000 was paid one year later in 2022, and $60,000 will be paid one year thereafter in 2023. We maintain a stock option plan for our nonemployee or independent directors. The purpose of this plan is to assist us in attracting and retaining key directors who are responsible for continuing the growth and success of our company. Under such plan, until 2022 options to purchase 1,500 shares are granted on each February 1st to all nonemployee directors for as long as each is a nonemployee director on such date. However, if a nonemployee director does not attend certain of the board meetings, then such option grants are reduced according to a schedule. However, our board of directors canceled the automatic grant of options to the nonemployee directors effective with the grant that had been scheduled for February 1, 2022. After discussions Mr. Atwood had with certain financial consultants relating to potential compensation plans in lieu of stock option grants to the Company’s independent directors, and consultation between Messrs. Madar and Atwood, it was determined that the most favorable way for the nonemployee directors to be compensated was to amend the 2016 Stock Option Plan to reinstate the automatic grant of stock options previously provided to nonemployee directors, commencing with a new automatic grant on the last business day of 2022, December 30, and continuing on the last business day of each year thereafter, subject to the approval of the shareholders of this Corporation at the 2023 annual meeting of shareholders. The automatic option grants to independent directors were approved by the Board of Directors with the following changes: Reinstatement of the automatic grant of nonqualified stock options to all nonemployee directors was made without any discretion on the part of the Executive Compensation and Stock Option Committee, with the right to purchase 1,500 shares of the our common stock under our 2016 Stock Option Plan, as amended (the “2016 Stock Option Plan”), at the purchase per share on the date of grant equal to the fair market value as determined in accordance with the 2016 Stock Option Plan, each exercisable for a six (6) year period; provided that, such options shall vest and become exercisable to purchase shares of Common Stock as follows: 20% one year after the date of grant, and then 20% on each of the second, third, fourth and fifth consecutive years from the date of grant on a cumulative basis, so that each option shall become fully vested and exercisable on the first day of the sixth year from the date of grant, with the automatic grant date to commence on the last business day of this year, December 30, 2022 and continuing on the last business day of each year thereafter, in lieu of the grant date on each February 1st. The following table sets forth certain information as of the end of our last fiscal year regarding all equity compensation plans that provide for the award of equity securities or the grant of options, warrants or rights to purchase our equity securities.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Executive Compensation and Stock Option Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. The “Company Selected Measure” column has been omitted, because we do not use any financial measures other than net income to otherwise link pay and financial performance.
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for Jean Madar(1) ($) | Compensation Actually Paid to Jean Madar(1)(2)(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non- PEO NEOs(1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($ Millions) | | | | | | | TSR ($) | Peer Group TSR ($) | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | 2022 | 1,369,077 | 945,026 | 890,907 | 696,314 | 138.82 | 126.46 | 151 | | 2021 | 1,230,000 | 3,199,857 | 904,237 | 2,316,873 | 149.91 | 140.75 | 110 | | 2020 | 1,387,603 | 1,246,062 | 1,035,765 | 876,113 | 83.75 | 116.80 | 50 |
Pay Versus Performance Disclosure
| 1. | Jean Madar was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below. |
Pay Versus Performance Disclosure
| 2020 | 2021 | 2022 | | Russell Greenberg | Russell Greenberg | Russell Greenberg | | Philippe Benacin | Philippe Benacin | Michel Atwood | | Philippe Santi | Philippe Santi | Philippe Benacin | | Frédéric Garcia-Pelayo | Frédéric Garcia-Pelayo | Philippe Santi | | | | Frédéric Garcia-Pelayo |
Pay Versus Performance Disclosure
| 2. | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
Pay Versus Performance Disclosure
| 3. | Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Option Awards column are the totals from the Option Awards columns set forth in the Summary Compensation Table. |
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for Jean Madar ($) | Exclusion of Stock and Option Awards for Jean Madar ($) | Inclusion of Equity Values for Jean Madar ($) | Compensation Actually Paid to Jean Madar ($) | | 2022 | 1,369,077 | (139,077) | (284,974) | 945,026 | | 2021 | 1,230,000 | — | 1,969,857 | 3,199,857 | | 2020 | 1,387,603 | (157,603) | 16,062 | 1,246,062 |
Pay Versus Performance Disclosure
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Change in Pension Value for Non-PEO NEOs ($) | Average Exclusion of Option Awards for Non-PEO NEOs ($) | Average Inclusion of Pension Service Cost for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2022 | 890,907 | (9,604) | (103,809) | 18,533 | (99,713) | 696,314 | | 2021 | 904,237 | (13,300) | 0 | 28,089 | 1,397,847 | 2,316,873 | | 2020 | 1,035,765 | (13,125) | 0 | 24,753 | 25,723 | 876,113 |
Pay Versus Performance Disclosure
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Pay Versus Performance Disclosure
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Jean Madar ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Jean Madar ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Jean Madar ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Jean Madar ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Jean Madar ($) | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Jean Madar ($) | Total - Inclusion of Equity Values for Jean Madar ($) | | 2022 | 318,516 | (198,256) | — | (405,234) | — | — | (284,974) | | 2021 | — | 1,309,106 | — | 660,751 | — | — | 1,969,857 | | 2020 | 354,290 | (193,047) | — | (145,181) | — | — | 16,062 |
Pay Versus Performance Disclosure
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2022 | 354,204 | (74,501) | — | (235,746) | (143,670) | — | (99,713) | | 2021 | — | 944,588 | — | 453,259 | — | — | 1,397,847 | | 2020 | 265,718 | (137,875) | — | (102,120) | — | — | 25,723 |
Pay Versus Performance Disclosure
| 4. | The Peer Group TSR set forth in this table utilizes a custom group of industry peers, weighted according to the respective peer companies’ stock market capitalization on December 31, 2019, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2022. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and the peer group, respectively. Historical stock performance is not necessarily indicative of future stock performance. The following table shows the peer group constituents. |
Pay Versus Performance Disclosure
| CCA Industries, Inc. | | Colgate-Palmolive Company | | Kimberly-Clark Corporation | | Natural Health Trends Corp. | | Summer Infant, Inc. | | The Estée Lauder Companies Inc. | | The Procter & Gamble Company | | The Stephan Co. | | United-Guardian, Inc. |
Pay Versus Performance Disclosure
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the three most recently completed fiscal years. Description of Relationship Between Company TSR and Peer Group TSR The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the Custom Peer Group over the same period.