"The plane, boss! The plane!" Pardon the Fantasy Island reference, but the latest outrage emanating from Abercrombie & Fitch
Abercrombie & Fitch will pay its CEO, Mike Jeffries, $4 million in one lump sum to limit his personal use of the corporate jet.
Let that sink in for a minute.
His amended employment agreement requires that Jeffries now pay for any personal use of the jet over $200,000 per year, but I guess a cool $4 million takes the sting out of having to muster some self-control, eh?
How clueless is Abercrombie's management and board? The personal use of corporate jets by a corporation's top brass became emblematic of hubristic excess last year, when TARP recipients like Citigroup
Or maybe they just take some kind of perverse pleasure from repeatedly poking shareholders straight in the eye. Last year, Jeffries was among the highest-paid CEOs in 2008, despite the fact that Abercrombie was stumbling badly.
In fact, Abercrombie's annual revenue and profit have dropped precipitously since the fiscal year ended February 2008. In the year ended January 2010, earnings per share just managed to break even, from over $5 per share the company had earned two years earlier.
According to several surveys, CEO pay has dropped overall for two years running. Jeffries' pocketbook appears to have been somehow "recession-proof," even if his company's business wasn't. Ahem.
In December, I outlined 10 Foolish reasons to avoid Abercrombie, painstakingly -- OK, maybe a bit obsessively -- drawn from several years' worth of history. Now we've got one more reason. Given Abercrombie's historical "issues" and continued indications of what really seems to matter to Abercrombie's top brass (themselves), investors would do well to stick to retail rivals like Aeropostale
Unless an Abercrombie shareholder's idea of a "fantasy" is extremely masochistic, it's not hard to imagine that the company's CEO will only continue to treat shareholders like whipping boys.