Ralph Lauren now links executive bonuses to how well it uses AI

Ralph Lauren has added "AI metrics" to the list of factors that can change how much its executives get paid in annual bonuses. Reuters spotted the change in a 131-page filing with the SEC, the US regulator of public companies. A company spokesperson said it shows executives the "opportunities for leveraging AI to enhance our work."

How common this is

Ralph Lauren looks ahead of the pack. Reuters reported that about 12% of S&P 500 companies listed AI goals in executive pay plans this year, up from 5% in 2024. But many of those are tech firms, such as Salesforce and IBM. In retail, the practice is still mostly unheard of. Recruiters also say they see few signs of AI goals showing up in pay offers.

Why retail is holding back

Many retailers are still experimenting. Walmart, Target and Kroger have launched AI shopping assistants, and AI is built into much of the software brands already use. Still, Anish Shah, CEO of recruiting firm Ruckus, says it is "still early days" for companies seeing big returns. Many retail AI plans are light on detail, he says.

Cory Morrow of Korn Ferry, who advises on executive pay, says bonus plans set the tone for what matters to a company that year. He also says they will always be driven mainly by financial results.

The cost-cutting problem

Shah says most AI talk in retail centers on saving money. He is seeing more junior hires, such as a VP of marketing instead of a chief marketing officer, and smaller teams. A marketing chief who once led ten people might now lead three or four, with AI filling gaps. That makes it harder to reward someone for using more AI.

There is also worry about low-quality AI output. Shopify CEO Tobias Lütke has called it "slop grenades," meaning AI-made work that others must fix.

What business owners can take from this

• Hiring managers now ask senior candidates how they have used AI in their work.
• Executives say they want more than AI used as a search engine.
• Proof that AI drives revenue is what would justify tying it to pay.

Shah says that story is not clearly mapped out yet for many brands. Until it is, AI-linked pay is likely to stay rare outside tech.