Rubin Ritter, the co-chief executive officer of online fashion retailer Zalando SE, may take a potential hit of more than $100 million — for his wife.
The 38-year-old executive said he will retire next year so his wife can pursue her career while he takes care of their children. The move could cost him as much as 93 million euros ($112 million) in options from a five-year incentive program set up in 2018, Bloomberg calculations show. The multi-millionaire couple is expecting its second child.
“I want to devote more time to my growing family,” Ritter said in a Dec. 6 statement. “My wife and I have agreed that for the coming years, her professional ambitions should take priority.” Ritter’s wife is a judge.
The decision is a publicity coup for the Berlin-based company that has been on the wrong side of the gender-equality debate. Zalando, a majority of whose customers are women, has a five-member executive board that’s solely made up of White men. It was among companies shamed last year by the AllBright foundation for failing to commit to any female management board members.
Zalando has since pledged to lift the proportion of women at its top five executive levels, including the management board, to 40% by 2023. With Ritter stepping down, there’s “a true chance for Zalando to show they mean what they said” by filling his post with a woman, AllBright’s managing director Wiebke Ankersen said.
Zalando isn’t unique in Germany Inc. in terms of gender inequality. The country’s gender pay gap is among the worst in Europe, and the proportion of female leaders populating its management board rooms trails most industrialized countries, according to AllBright. Only 9.3% of the board seats at Germany’s 160 biggest companies were held by women last year, it said.
Men sacrificing high-profile careers for their wives is also extremely rare in Germany. In 2007, Franz Muentefering, then Germany’s Vice-Chancellor in Angela Merkel’s government, quit to take care of his wife, who had cancer. Last year, Allianz Global Investor’s Andreas Utermann stepped down to look after his three daughters so his wife could focus on her business.
Ritter’s exit will leave founders Robert Gentz and David Schneider as co-CEOs from next year, deprived of their strategy chief and the face of the company. Zalando, which has blended fashion, software and logistics capabilities to become Europe’s largest online retailer for clothes, has been uniquely run by three co-CEOs.
Famous for its corporate culture that resembles a California tech company — complete with a kindergarten, yoga studio and a rooftop basketball court at its headquarters — Zalando also introduced Silicon Valley-style executive compensation to Germany, with a meager base pay but option packages potentially worth moonshot payouts.
Ritter joined Zalando 11 years ago and helped catapult the company, which sold shares to the public for the first time in 2014, into one of Germany’s most lucrative IPOs of the past decade.
Ritter wasn’t available for further comment on his decision to step down or the financial hit he might take. Still, he and his wife will hardly be living on a shoestring budget. Previous options programs will leave Ritter a rich man.
Almost half of the 1.75 million options Ritter was granted under the company’s five-year incentive plan introduced in 2018 will probably have vested when he leaves after the company’s shareholders’ meeting next year.
Each of those options has a maximum value of 97.14 euros, meaning Ritter’s stake from that plan might be worth 76 million euros when the waiting period is over in December 2022. That’s if Zalando’s shares extend gains and the company’s sales continue to grow at least 15% a year.
As of Dec. 31, 2019, Ritter also held 2.7 million options from the company’s 2013 incentive plan, a package that would be worth about 170 million euros if exercised at today’s share price. Ritter sold shares worth 39.2 million euros between May and September, regulatory filings show.
Not surprisingly, on Dec. 6, the executive characterized Zalando’s vertiginous rise as “a stunning success story that exceeded my wildest dreams.”