Asos recently changed the requirements for its annual CEO bonus programme, which analysts said was a reflection of the rapidly deteriorating performance of online clothing retailers.
The retailer stated it was “appropriate” for its compensation committee to “amend the performance measures and weightings… to better line with business aims [for the current financial year]” in a note covertly posted on its website.
The company’s annual report, which was released three weeks earlier, stated that the weighting for current-year revenue was 30 percent; nevertheless, it is now only 15 percent.
Adjusted pre-tax profit has been reduced from 30 percent to 25 percent, while adjusted cash flow has increased from 15 percent to 35 percent weighting.
Although the relative importance of strategic, environmental, social, and governance factors remained constant, “cost mitigation” took the place of references to active customer counts, gross margins, and individual goals within this category.
The bonus programme is applicable to both the person chosen to fill the position of chief financial officer left open by Mat Dunn at the end of October and the new chief executive Jose Antonio Ramos Calamonte, who took over for Nick Beighton in June.
The maximum payout is 150 percent of the basic income, and it is based on how well the employee performs in relation to specific goals throughout a given fiscal year.
For the year ending in August 2022, it produced no rewards. Different measurements are used in different long-term incentive programme, which is not being changed.
The compensation thresholds for each of the criteria have not been publicised, as is common in the retail sector.
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Changes were made in response to full-year results released in October when Calamonte admitted that the business needed to get rid of surplus stock and took a provision of up to £130 million to account for the associated costs.
The 12-month turnaround plan, which Calamonte released alongside the results, would concentrate on a series of “decisive, short-term operational initiatives to streamline the business, alongside steps to unleash longer-term sustainable growth.”
Source: Retail Gazette