So how much do fashion CEOs actually make? In America, compensation packages up to $10 million and ambiguous justifications

In fashion, where storytelling is an indispensable component of selling, there is something else that seems to need telling — and above all selling — to investors: namely, CEO pay. It sounds like a joke, the kind that raises few laughs and plenty of questions, yet it is reality. An analysis by WWD of executive compensation at US companies found that last year 23 executives received total pay packages exceeding $10 million. As has long been the case, and in perfect keeping with the rest of corporate America, the group is anything but diverse: 18 men and just 5 women. Then again, the fact that female representation at the top of the industry remains a minority is hardly news.

At the top of the rankings are Elliott Hill, CEO of Nike, who returned to the company in 2024 with total compensation of $36.3 million; former Walmart CEO Doug McMillon, with $29.2 million; and Ernie Herrman, CEO of TJX, with $26.6 million. Amid tens of millions of dollars and ever-larger bonuses, executive pay continues to climb. Yet, surprisingly, it is the very same managers who feel the need to defend those packages. Whether that is right or wrong is another matter. Before drawing conclusions, it is worth examining how the system works.

A multimillion-dollar drink 

One of the reasons behind the steady rise in fashion executive pay is the way it is determined: boards of directors benchmark their CEOs' salaries against those of competitors and aim to position them around the market median. It is a mechanism that inevitably raises the bar over time — but only for the executive tier, given the rather unjust situation, in terms of pay and beyond, faced by artisans, tailors and designers.

To this must be added a factor that is often overlooked in public debate. The compensation figures reported in proxy statements — official documents that publicly listed companies send to shareholders ahead of the annual meeting — assign to shares granted to CEOs the value they hold at the time of the grant. In reality, their actual earnings depend on the achievement of corporate targets and on the future performance of the stock.

So even a CEO's pay package needs to be framed as a narrative. According to Chan Pedris, managing director of ISS-Corporate, in 2024 the average compensation of S&P 500 CEOs — that is, the largest companies listed on US stock exchanges — rose by 5%, reaching $17.5 million. Excluding the giants and looking at the remaining companies in the Russell 3000, growth slows to 1%, with an average of $5.6 million.

The fashion and retail sector sits somewhere in between: companies in the industry, including Tapestry and Ralph Lauren, recorded an average increase of 4.5%, reaching $8.4 million, with a 23% rise over the past five years. Nike, for its part, points out that 92% of its CEO's compensation is "at risk" — that is, contingent on meeting targets. There is still a guaranteed 8%, however, which amounts to roughly $2.9 million: a figure equal to approximately sixty times the salary of the average Nike employee, who earns $48,695 a year, in exceptional cases. A ratio that says far more than any corporate press release.

Pay for performance

Matthew Vnuk, partner at Compensation Advisory Partners, analysed in detail the data gathered by WWD, finding that the two CEOs who recorded the largest increases in realised compensation were also those who delivered the best returns to shareholders. Joanne Crevoiserat, CEO of Tapestry, tops the list with realised pay of $12.6 million, up 216%. Patrice Louvet, CEO of Ralph Lauren, follows with $46.2 million and a 179% increase. In both cases, shareholder returns grew by approximately 200% over three years.

This demonstrates how the assessment of a CEO today is no longer confined to the operational management of the business. What is being evaluated is the ability to generate financial value, reassure the market and convince investors. Management becomes performance, and success is measured as much by results as by the narrative that accompanies them. Nike distils this philosophy into a simple yet far from simplistic phrase: "Pay for performance." But to what extent is this logic truly sufficient to justify compensation packages of such magnitude?