The business of Europe’s largest online fashion retailer Zalando is doing well. This can now also be seen in the princely salaries of the bosses.
Dhe board members of Europe’s largest fashion retail platform, Zalando, were rewarded princely last year. The recently resigned co-CEO Rubin Ritter received a total of 53.3 million euros in the past year according to the inflow recommended by the Corporate Governance Code, as can be seen in the company’s compensation report for 2020. The two founders and co-CEOs Robert Gentz and David Schneider, who formed the trio with Ritter until March, received a salary of around 40.5 million euros each.
All three of them only receive a fixed salary of 65,000 euros a year – but there are also large amounts from share-based multi-year compensation programs that were launched a few years ago. They entitle managers to buy a certain number of new shares at a set low price that is only a fraction of today’s share price.
Since the Zalando share price has multiplied in recent years, the long-standing board members have high sums of money. Board members who have not been there for that long come on lower amounts: CFO David Schröder received a total of almost 12 million euros, product and operations manager Jim Freeman 11.4 million.
Annual profit of 226 million euros
While one can argue about the appropriate level of managerial salaries, it is at least difficult to blame the Zalando bosses for having done their job badly in the past year. The online retailer is undoubtedly experiencing a tailwind from the corona pandemic, so that its share price rose by more than 70 percent in the past year. But that is also due to the good business practices of the Berlin company. For the first quarter from January to March, it just showed the greatest sales growth since going public seven years ago – in the time before the third corona wave, when an end to the lockdown actually seemed in sight. In addition, the first and third quarters of the year are traditionally considered to be the weaker ones in the fashion trade, with a loss in the same period of the previous year.
There is no longer any question of that: With a quarterly profit of a good 34 million euros and an annual profit of 226 million euros, Zalando is operating profitably. The company is particularly successful with its platform strategy, i.e. the approach of not only using its Internet portal to sell its own products, but also to make it available to other, mostly branded manufacturers. During the Corona crisis, it also cleverly took stationary retail out onto its platform, for example C&A has been selling fashion via Zalando since then. In this way, the company can position itself on the one hand as the savior of the retail trade and at the same time tap into new sources of commissions.
When it came to the decision to become a platform, Zalando threw its own brands out of its range two years ago – an entrepreneurial risk that could also have gone wrong. But it paid off.