Fashion retailer Lovisa appoints John Cheston as new global CEO
The $3.25bn retailer confirmed the new era on Wednesday morning alongside the appointment of Mark McInnes as new executive deputy chairman.
Mr Cheston will be paid a base salary of $2.35m but could earn additional short-term cash payments up to $2.35m if he substantially elevates the retailer's earnings.
According to the renumeration conditions set out by Lovisa's board, Mr Cheston will receive an extra $2.35m on top of his base salary if he guides the company to earnings growth of 30 per cent or more.
If he achieves 18 per cent growth in the EBIT metric, or earnings before interest and taxes, he gets $188,000 but zero if EBIT does not hit the 18 per cent threshold.
Further, Mr Cheston, who ran children's retailer Smiggle for more than a decade before Lovisa, could receive up to $7.05m over three-years under a long-term incentive plan if he continually hits EBIT growth of 30 per cent or more for each financial year.
The reward will be issued in company shares rather than cash and is subject to a two-year holding period.
Mr McInnes, meanwhile, will enjoy a cash salary of $2m in his new role on the board.
Lovisa, backed and run by billionaire entrepreneur Brett Blundy, recruited Mr Cheston and Mr McInnes from Solomon Lew's Premier Investments last year.
'Mark's extensive experience and proven track record of success in a large Australian ASX-listed retailer, combined with his leadership skills, make him an invaluable member of the board and executive management team,' Mr Blundy said on Wednesday.
'We are confident that his contributions will further strengthen our position in the industry and drive long-term value for shareholders'.
Mr Blundy, through his investment vehicle BB Retail Capital, owns 39 per cent of Lovisa's issued capital.
Lovisa, along with all retailers, is navigating an increasingly uncertain global trade environment.
Year-to-date, shares in the company have traded down 3.5 per cent.
Over a five-year time horizon, however, the company's value has boomed 312 per cent, moving from about $7 a share in June 2020 to $29.33 today.
The company has 943 stores worldwide as of December, including 180 in Australia.
It has recently opened its first franchise stores in the Ivory Coast and Republic of Congo in Africa and Panama in Central America.
In its half-year report from February, the company reported $405.9m in revenues and $56.9m in profits.
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