Guess? Inc. co-founder, Executive Chairman and Chief Creative Officer Paul Marciano has resigned from his executive chairman position at the apparel company after an investigation into his behavior that found he exhibited "poor judgment."
"On certain occasions, Mr. Marciano exercised poor judgment in his communications with models and photographers and in placing himself in situations in which plausible allegations of improper conduct could, and did, arise," according to a company statement filed with the SEC on June 12.
Marciano resigned June 11, effective immediately. He will remain on the company's board and with the company until the end of his employment agreement on Jan. 30, 2019, although he will not renew the contract. He has begun to transfer his duties and responsibilities to Guess CEO Victor Herrero.
Marciano has also entered into non-confidential settlement agreements with five individuals arising out of the allegations of inappropriate conduct for a total amount of $500,000. Marciano entered the settlements "to avoid the cost of litigation" and does not admit liability or fault, Guess said.
The company's board on June 11 elected Paul Marciano's brother, Guess co-founder Maurice Marciano, to be the new chairman of the board. Maurice Marciano was serving as chairman emeritus of the company.
The allegations against Paul Marciano included inappropriate comments and texts as well as unwanted advances including kissing and groping, the company said. Guess said that after interviewing more than 40 people and reviewing about 1.5 million pages of documents, it could not reach a conclusion in the case of some allegations because individuals declined to be interviewed or insufficient evidence was provided to investigators. In other cases, the investigation found that "credible accounts were given by both sides," Guess said.
Guess did not immediately respond to S&P Global Market Intelligence's request for further comment.
The special committee formed to investigate the claims of sexual harassment presented its findings and recommendations to the Guess board on June 7 and June 11.
Guess announced Feb. 9 that it had formed a special committee. Paul Marciano "adamantly" denied the claims of sexual harassment, the company said at the time. On Feb. 20, Guess said Paul Marciano would take an unpaid leave of absence from the company.
Paul Marciano will receive his salary for the period between June 11 and Jan. 30, 2019. He was not paid between Feb. 20 and June 11, the company said.
Article was amended on June 13 at 1:13pm ET to include information on Paul Marciano's settlement agreements.
