Richemont reviewing HR function after backlash over executive remuneration
Pay packages for Richemont's top executives increased 36 percent while other employees received salary cuts.
The Swiss luxury-goods maker Richemond is reportedly reviewing its HR department after it emerged that the company gave increases in senior executive compensation while many other employees received pay cuts. According to the company’s annual report for the year ended 31 March, the total compensation for the senior executive committee increased by 36 percent to 41.4 million Swiss francs (CHF), which roughly amount to R780 million. This included a 49.54 percent increase in total remuneration for group chief executive Jérôme Lambert who received CHF8.06 million (R146 million) and an 11.87 percent increase for the group CFO Burkhart Grund, who received a total remuneration package of CHF6.03 million (R110 million).
Group head of HR Sophie Guieysse, whose package increased by 58 percent to CHF 3 million (R55 million), has come under fire for the remuneration policy, which has seen top executives receive significant performance-related compensation increases while overseeing significant cuts to staff and salaries across the group.
On Friday, the company announced that "Sophie Guieysse is stepping down from the Senior Executive Committee with immediate effect, and will not stand for re-election to the Board of Directors at the annual general meeting on 9 September 2020."
Richemont has since issued a statement on the issue of reviewing its HR function. It states that: “Further to media reports, Richemont confirms that it has initiated a comprehensive review of its HR function, which may have an impact on the composition of its Senior Executive Committee…No decision has been made so far. The Company has no further comments to make at this stage.”
Richemont, like many other companies, has been severely impacted by the Covid-19 pandemic with Swiss watch exports dropping more than they ever have in since the turn of century as the disease outbreak caused factory closures, national lockdowns and travel bans across the world.