Core Points - Estée Lauder has completed the formation of a new executive team and announced its compensation plan for the fiscal year 2025, which includes base salary, pension, stock options, bonuses, and other benefits [1][2] - The overall annual target compensation for Estée Lauder's management has decreased by 28% following an internal restructuring [1][2] - The former CEO Fabrizio Freda's compensation has seen a significant reduction of 73%, while the current CEO's salary has dropped by approximately 50% compared to the previous CEO [1][3] Compensation Details - Fabrizio Freda, the highest-paid executive, will receive a total compensation of $17.8 million (approximately 127 million RMB) for the fiscal year 2025, with a portion consisting of stock options that may not realize full value due to stock price fluctuations [3][25] - Other executives have also experienced salary reductions, with the current CEO Stéphane de La Faverie earning $9.6 million (approximately 6.8 million RMB), a decrease of 46% from Freda's previous salary [26] - The current CFO Akhil Shrivastava's salary is $3.6 million (approximately 2.6 million RMB), reflecting a 52% drop from his predecessor [26] Performance Context - Estée Lauder has faced significant performance challenges, with net profits declining by 16%, 58%, and 60% from fiscal years 2022 to 2024, leading to a projected loss of $1.133 billion (approximately 808.5 million RMB) for fiscal year 2025 [28][30] - The company's sales and net profits have decreased, with Q4 of fiscal year 2025 reporting sales of $3.411 billion (approximately 24.34 billion RMB), a 12% year-over-year decline [30] Strategic Response - In response to ongoing performance issues, Estée Lauder has initiated significant reforms, including the establishment of a new leadership team and the launch of the "Beauty Reimagined" brand revitalization plan [33][34] - The return of veteran executive Lisa Sequino aims to strengthen the strategic planning and global growth of key makeup brands within the company [35] - The management's collective salary reductions highlight the direct correlation between the company's performance challenges and stock price volatility, emphasizing the need for strategic adjustments to restore market confidence and achieve long-term growth [38]