Compensating

When Apple hired Burberry CEO Angela Ahrendts away from the venerable fashion brand, I wondered how they managed to poach a CEO from a fairly large and growing fashion brand to be a lowly Senior Vice President1. Well, now we know at least the monetary part2 of the pitch. No question $73 million would buy a lot of plaid.

From where I sit, it’s difficult to tell what significance, if any, Ahrendts’ presence had on Apple’s most recent quarterly results; The biggest part of Apple’s business is the iPhone and the iPhone 6/Plus were certainly already well on their way to production by the time she stepped in. But the results in China, supposedly Ahrendts’ specialty, were astounding and even if she played no part in that achievement, the compensation package would hardly stand out on Apple’s most recent quarterly balance sheet3.

While money could easily be a stumbling block for this type of recruiting (if the number is too low), I bet it’s rarely the most persuasive part of the package. I imagine the same type of person who would aspire to be the CEO of trend-setting luxury fashion brand is probably the same type of person who could find a challenge ushering in a new era of retail at Apple. Hiring Ahrendts pretty much substantiated rumors of an Apple Watch, at least for Apple followers, because “luxury fashion” is exactly the approach Apple would take to bring their not-yet-announced take on wearables to market. Not much about what they’ve done since announcing Apple Watch late last year would refute that. Couple that with Ahrendts’ previously mentioned success in China and the role almost seems perfect for her.

  1. Any argument about the relative size of Burberry compared to Apple’s retail business underestimates the specific character traits of the type of person it takes to be a CEO.
  2. See above. Along those same lines, money is often also not a primary motivator, though I’m sure it doesn’t hurt.
  3. Especially considering a lot of the compensation is in company stock.