Abercrombie & Fitch Ties CEO Compensation More to Company Performance

Abercrombie & Fitch is reworking its contract with Chairman and CEO Michael Jeffries, tying his compensation more closely with company performance.

Jeffries helped establish the company's reputation after arriving in the 1980s, but Abercrombie has struggled recently and Jeffries came under withering fire for comments relating to the type of customer he wants in his store and the fact that the store does not offer plus sizes.

Shares are down 30% this year, but almost all teen retailers are under pressure.

Just last week, Engaged Capital, which owns 400,000 shares, sent a letter to the company demanding that Jeffries be replaced.

In a regulatory filing, Abercrombie & Fitch said that Jeffries will still have an annual base salary of $1.5 million, which will be reviewed every year. The new agreement has no retention or sign-on grant, and the formula for semi-annual equity grants contained in the 2008 agreement was eliminated.

Jeffries is eligible for long-term incentive awards each year with a target value of $6 million. The target value will be reviewed annually and may be increased at the sole discretion of the compensation committee if company performance warrants such an adjustment. The vesting of at least 60% of each annual long-term incentive award (based on the target value of the total award) will be subject to performance criteria as determined by the compensation committee.

Similar to the 2008 contract, Jeffries can use the company aircraft for up to $200,000 of personal travel. Abercrombie & Fitch said that this is for security purposes.

Also on Monday, the company said that it plans to hire brand presidents for abercrombie kids, Hollister and its namesake brand.

link


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2757449, ~/Articles/ArticleHandler.aspx, 9/17/2014 3:38:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement