As American Apparel flirted with bankruptcy, suffered declining sales, got sued by Woody Allen, lost many of its workers following an immigration raid, and defended yet more sexual-harassment lawsuits, Dov Charney's performance was apparently so stellar he deserved a bonus.
According to an SEC filing, as reported by BNET, during the year 2009, American Apparel paid Dov Charney a $1.1 million bonus, as part of a total compensation package of $1.9 million. Here are some things that happened to American Apparel on Charney's watch during the year 2009:
- About 1,800 employees — more than a quarter of the company's workforce — had to be fired because Immigration and Customs Enforcement found they were not legal to work in the United States. Left short-staffed, American Apparel's factory suffered production delays from which it is still recovering.
- The company's stock price fell from a 2009 high of $6.60, to $3.10.
- Dov Charney's dad, Morris Charney, an architect, was paid $42,000 for three months' worth of "architectural consulting."
- In explaining why he couldn't talk to a journalist about the company's financial performance, American Apparel's Chief Financial Officer said, "We almost went bankrupt last Friday. I'm sorry but I was busy with that." The release of the CFO's email got the SEC investigating — for the first time.
- American Apparel sold 18% of itself to the private equity firm Lion Capital, for $80 million. This was the first time — but certainly not the last — that Lion probably saved Charney's company from bankruptcy.
- Also in 2009, American Apparel saw its last month in which same-store sales went up! ("Same-store" sales is a measurement of sales revenue that controls for store openings.) January, 2009, to be precise, was the last time American Apparel's same-store sales actually increased year-on-year. Same-store sales began declining — often by double-digits — in February of '09, and have to date fallen every single month since. For the full year of 2009, American Apparel's same-store sales fell by 10%.
- The company got its first warning from the New York Stock Exchange over its untimely filing of financial results; further late filings (and further delisting warnings from the exchange) have proven to be a theme.
- American Apparel used a still from Annie Hall on a billboard, without authorization, and Woody Allen sued the company for damaging his image. Things got nasty when American Apparel's lawyers argued that Allen had damaged his own image long ago by fucking his girlfriend Mia Farrow's adopted daughter, and then Dov Charney claimed he only used Allen's image because he, like, totally respected and admired him so damn much. Then American Apparel paid Woody Allen $5 million to go away.
- The company was sued twice (more!) for sexual harassment, and once for failing to give proper hourly wages and mandated breaks to its factory workers. The latter suit, which is class-action, is now in arbitration, according to American Apparel's (totally hilarious) lawyer Peter Schey.
So, in conclusion, Dov Charney definitely earned his gajillion-per-cent bonus. No doubt about it.
In American Apparel's Financial Crisis, Dov Charney Did Very Nicely, Thank You [BNET]