When Art Peck took the reins as chief executive officer of Gap Inc. in February 2015, he was handed the responsibility of fixing slumping sales across its retail banners. That hoped-for growth never materialized, however; total company revenue dropped from $16.4 billion in 2014 to $15.8 billion last year, and Peck’s paycheck reflected it.
“In fiscal 2015 we did not meet the performance targets in our incentive compensation plans, so our CEO did not receive a bonus and our other executives received bonuses that were significantly below target,” read a proxy filed by Gap Inc. with the Securities and Exchange Commission Monday.
Peck’s total compensation for the year was $6.1 million, comprising his $1.3 million base salary in addition to $2.7 million in stock awards, $2.1 million in option awards and $27,611 in other compensation, which included his pension and life insurance. Seventy-eight percent of his pay was performance-based.
By comparison, Peck’s predecessor, Glenn Murphy, received a total of $16 million in fiscal 2014, 89 percent of which was performance-based.
“In connection with the appointment of Peck as CEO, effective Feb. 1, 2015, we established a compensation package that is structurally similar to that of our other executives,” the proxy continued. “The package is intended to reward him for sustained improvement of the company’s financial performance and returns to shareholders while helping to promote alignment of interests across the executive team.”
2015 was a challenging year for much of the retail industry and excluding Old Navy, Gap Inc. posted sales declines across the board. Gap Global revenue fell from $6.17 billion in 2014 to $5.75 billion last year, while Banana Republic sales were down from $2.92 billion to $2.66 billion. Athleta, Intermix and the now-defunct Piperlime recorded a combined drop from $729 million to $715 million.
Old Navy’s performance was more or less flat, bringing in about $6.68 billion in 2015 versus the prior year’s $6.62 billion.
But in a February press release detailing the company’s fiscal 2015 performance, Peck said he was confident the right strategies were in place to fuel long-term growth.
“We made significant progress in 2015 transforming our product operating model, enabling us to be more responsive to trends and market conditions, and consistently deliver on-brand product collections,” he said. “Our brands are strengthening their connections with customers through digital, and especially mobile, enhancements that create richer experiences whether shopping online or in stores, or any combination of channels.”