Storytelling is an essential part of fashion. 

Brands live and die by how they’re presented and how successfully they can romance and communicate with the consumer, who ultimately wants some bang for their buck. 

Turns out, there’s a lot of storytelling in C-suite pay as well.

The job of running a large, publicly traded retail or fashion company is not getting any easier. Tariffs, AI, rising gas prices and competition for consumer attention all keep chief executive officers on their toes. 

But they’re paid pretty well for it. 

A WWD study of executive pay at U.S. companies found 23 executives with compensation that tallied more than $10 million last year. As has historically been the case — and in keeping with corporate America at large — it’s a pretty homogeneous group of 18 men and five women. 

Leading the pack were Nike Inc. CEO Elliott Hill, who rejoined the company in 2024 and logged total compensation of $36.3 million; former Walmart Inc. CEO Doug McMillon at $29.2 million and TJX Co.’s CEO Ernie Herrman at $26.6 million. 

The pay at the top has continued to grow. It always seems to wow — and is often questioned.

But CEO pay also has its defenders. 

“These are the people who are working 24 hours a day, working seven days a week,” said Les Berglass, CEO of executive search firm Berglass + Associates, of fashion CEOs overall. “These are the people I work with. I know how hard they work.”

Some of the regular pay increases stem from how boards set CEO pay. For instance, companies often compare their executive pay to what leaders are paid at rival companies and aim to be middle of the pack. Over time, that pushes the average pay checks up.

“It’s built in,” Berglass said. “It’s part of the machinery. I feel the same way about compensation as I do — and I’m a New Yorker — when I go in and someone’s charging me $75 for a drink.” 

Some things are just expensive.

But the numbers are better understood with nuance and context. 

Overseeing any of those top companies is a big job. Collectively Walmart, TJX and Nike have a market capitalization of $1.1 trillion. Not quite an AI or tech valuation, sure, but it’s still a big number.

And the top-line pay numbers reported to shareholders in the company’s annual proxy statements value the stock awards as if they were paid out the day they were granted. In reality, the value of those awards depend on whether CEOs hit their targets, actually get the shares and how the stock responds. 

“When we look at these numbers, it’s not necessarily cash in the CEO’s pocket,” said Kyle Eastman, partner at Compensation Advisory Partners. “There are equity components, there’s an annual incentive component. And when public company shareholders scrutinize CEO pay, they don’t object to the number. 

“Where they object is where there’s a big number and no story behind it,” Eastman said. “What shareholders are looking for is pay that is justified, that’s got a good rationale.”

Boards set CEO pay and are subject to shareholders putting pressure on them to explain the big paychecks, although it’s very unusual for directors to be voted out for overpaying. 

“The story [the company tells shareholders] might be, ‘We performed well financially. Our share price performed well,’” Eastman said. “Another component is what’s the competitive market doing? Companies talk about their peer groups and where they intend to position pay relative to peers. That’s all part of the story behind the headline.”  

As usual for such a creative industry, the storytelling seems to be pretty good. 

Chan Pedris, managing director of compensation and governance advisory at ISS-Corporate, said CEO pay in the S&P 500 grew 5 percent on average to $17.5 million last year. 

Taking away the S&P 500, eliminating the biggest companies, and looking at the rest of the Russell 3000, pay inched up 1 percent to $5.6 million. 

Fashion and retail is somewhere in the middle. 

The consumer durables and apparel sector — including companies like Tapestry Inc. and Ralph Lauren Corp. — saw average CEO pay rise by 4.5 percent to $8.4 million last year, according to Pedris. Over the past five years, that translates into a 23 percent jump.

“There’s a lot of tension between paying for performance and also the public perception because it’s an industry where you can touch the end product,” Pedris said of fashion. “You can touch the end product, it’s tangible, and we are talking about very labor-intensive industries. So when companies have things like layoffs or store closures or weak performance, you still keep reading the headline about executive pay rising.” 

Thing is, there are also a lot of other headlines that boards and CEOs have to contend with. 

“They’re facing a lot of challenges in terms of transformational goals, digital execution, and trying to create shareholder value at the same time, while also being faced with a lot of pay level challenges and workforce issues and store closures and so on,” Pedris said. “There’s quite a few things that CEOs need to wrestle with. And I think more and more, you’re being paid for dealing with a lot of the uncertainty that’s ahead.

“The pay needs to be sold to all the stakeholders of the company,” he said. “The boards obviously need to do a good job of communicating the rationale behind the pay and as to why CEOs are being paid this much.” 

Nike’s proxy statement, which sets up issues for shareholders to vote on at the annual meeting, offers a good example, especially since Hill ranked as the highest-paid CEO in U.S. fashion and retail last year. 

“Our philosophy is to ‘pay for performance,’” the company said in the regulatory filing. “As a result, executive compensation is highly incentive-based and includes, among other elements, a mixture of variable cash- and stock-based compensation. 

“In total, 92 percent of total target annual compensation for our CEO is at risk,” Nike said. 

The other 8 percent of guaranteed pay is a still hefty sum at $2.9 million. That’s about 60-times the $48,695 that the median Nike employee made, looking at the global workforce of 76,600, according to figures in the proxy statement. 

Nike, of course, is a work in progress. If Hill, who’s still relatively new to the job, can get the company back on track, it will be a good day’s work. 

CEO pay might just be one of the things that remains controversial, a source of derision, of comedy, of envy and more. 

But sometimes the system works in its own way. 

When Matthew Vnuk, another partner at Compensation Advisory Partners, ran the numbers of WWD’s pay study for a deeper dive, he found that the two CEOs at the top of the list with the biggest increases in their actual realized pay also had the best performing companies, at least when accounting for one- and three-year total shareholder return and gross margin. 

Tapestry Inc. CEO Joanne Crevoiserat led the list with “realized pay” of $12.6 million, a 216 percent increase. That includes the actual salary paid, actual cash bonus and the value of stock options that were exercised or vested during the year, plus any perquisites. 

Number two was Ralph Lauren’s CEO Patrice Louvet, who realized pay of $46.2 million, a 179 percent rise. 

Shareholder return is up about 200 percent over three years for both companies. 

Clearly, the Tapestry and Ralph Lauren boards feel their CEOs are performing.

“One of the things we also see boards spending a lot of time on right now, and they’re talking about is are these CEOs getting it right?” Vnuk said. “It’s not just on revenue and operating income and total shareholder return, but also when the boards are looking at the team and the team they’re developing. There’s a great opportunity at some companies to link the broader annual CEO performance assessment with annual pay decisions to incorporate more criteria into what is impacting pay directly than just two or three metrics.”