NEW YORK (AP) -- G-III Apparel Group Ltd. said Thursday that it tightened restrictions on compensation for its top executives in response to shareholder concerns.
The New York-based clothing company said the changes to its compensation and governance programs include higher company performance thresholds that must be met before cash bonuses are paid to Chairman and CEO Morris Goldfarb and Vice Chairman Sammy Aaron.
G-III said that shareholders have complained that the previous targets weren't tough enough. As a result, both men agreed to amend their contracts so that they will not receive annual bonuses unless G-III's pretax income exceeds $10 million.
For the nine months ended in October, pretax net income totaled $78.5 million.
The company also put in place an annual cap on the amounts that the executives can earn through their annual bonus. Under the revised agreements, a target annual bonus will be established based on the company's annual budgeted pretax profit. The total possible annual bonus will then be capped at two times the target value, G-III said.
The company put in place additional requirements for the awarding of performance-based stock incentives. The changes include a "clawback policy" that would allow G-III to recoup bonuses if they were earned at least partially as a result of financial results that were later restated.
The company also has agreed to create a lead independent director position on its board, and Goldfarb has agreed to resign from one other board that he serves on, so that he will only serve on two outside boards. According to FactSet, Goldfarb serves as a director at RLJ Entertainment Inc. and Christopher & Banks Corp.
G-III nominated Allen Sirkin, former president of apparel maker PVH Corp., for election to its board at the company's upcoming annual shareholder meeting, saying that the addition of Sirkin would both boost the board's retail expertise while increasing its independence.
G-III sells coats and dresses under brands such as Marc New York, and has fashion licenses for brands including Calvin Klein, Sean Jean and Kenneth Cole, as well as licenses with professional sports teams and colleges.
In midday trading, its shares rose 15 cents to $37.35. Over the past 52 weeks, the stock has traded between $21.84 and $39.50.