Estee Lauder Cos. Inc. Chairman Leonard Lauder gave himself a 20 percent cut in salary in the latest fiscal year, a year in which the cosmetics company's net income fell nearly 40 percent.
Lauder, the 73-year-old chairman of the eponymous company founded by his mother in 1946, said through a spokeswoman on Friday that "the reduction was at his request and a personal decision."
His annual salary fell to $1.44 million from $1.8 million.
Lauder's bonus, as well as the bonuses of other top executives, were reduced due to the company's results.
"Fiscal 2006 was a challenging year for the company and certain of its sales divisions," the board's compensation committee said in a filing with U.S. regulators on Friday. "Accordingly, in September 2006, the committee approved an aggregate bonus payout to each executive officer that was less than his or her aggregate, preset target opportunities."
Leonard Lauder's bonus fell to $1.37 million from $1.62 million. President and Chief Executive William Lauder, Leonard Lauder's son, saw his salary remain flat at $1.5 million. His bonus fell to $1.52 million from $1.8 million.
Sales in the fiscal year ended June 30 rose 2.9 percent, while shares of Estee Lauder fell 1 percent.
The company, whose brands include Clinique and Aveda, has been pressured as Federated Department Stores Inc. (FD.N: Quote, Profile, Research), which owns the Macy's and Bloomingdale's chains, closes stores after buying May Department Stores, leaving less outlets for companies like Estee Lauder to sell cosmetics and fragrances.
But Estee Lauder hopes to take advantage of the situation this year, including a national promotion at Macy's stores to coincide with Federated officially changing the name of the acquired May stores to Macy's.
In August, Estee Lauder forecast first-quarter earnings of 15 cents to 20 cents per share, well below Wall Street expectations for 33 cents. The company cited the Federated-May disruption and higher marketing spending.
