Abercrombie & Fitch extends CEO’s contract | RetailDetail

Abercrombie & Fitch extends CEO’s contract

Abercrombie & Fitch extends CEO’s contract

Abercrombie & Fitch has decided to extend CEO Mike Jeffries’ contract with one year, despite seeing its revenue dropping for a long time and share holders asking for the termination of Jeffries’ contract.

Shareholder not pleased

Jeffries’ contract started 5 years ago and was supposed to end on 1 February 2014, but has now been extended for one year. The CEO will be earning 1.1 million euro per year in the new contract, but if the company manages to reach certain goals, he might get a yearly bonus of up to 3.3 million euro. Embedded in the contract is a ‘long-term incentive’, which may culminate in a 4.5 million euro payment.

 

Despite these numbers, Jeffries is running a company that has lost a lot of its glamour. A&F has been losing turnover for three quarters in a row and that is partly why Engaged Capital (owning 0.5 % of the company’s stock) has been asking for his resignation. Engaged Capital is also hoping the company will be sold, something "Jeffries’ presence will hinder tremendously", according to the shareholder.

 

Engaged is not happy with his new contract: “This decision appears to be made without any substantive discussion with shareholders — a rushed response, less than one week after receiving our letter [to fire Jeffries]”, Glenn Welling, managing director for Engaged Capital, said in a statement directed at Abercrombie & Fitch’s board.

 

 

 

(Translated by Gary Peeters)

Questions or comments? Please feel free to contact the editors


EU votes for better organic label legislation

20/04/2018

European Parliament adopted a bill to regulate the organic industry: things will be stricter, but also fairer and clearer. An organic label and importation legislation should help promote Europe’s local organic manufacturing companies.

Heineken and Bavaria seek fortune outside of Europe

19/04/2018

Even though the European beer market continues to struggle, Dutch brewery groups Heineken and Bavaria have published growing turnovers. Bavaria set a record turnover, Heineken raised its turnover 4.3 % in the past quarter.

Danone boasts strongest like-for-like turnover increase in past five years

19/04/2018

French food giant Danone’s first quarter was an impressive one: like-for-like turnover grew 4.9 %, its best performance in the past five years.

Weak dollar has negative impact on Unilever

19/04/2018

Unilever has seen its first quarter turnover drop more than 5 % because of negative exchange rate fluctuations. Excluding that impact, the food and care product manufacturer’s turnover would have grown 3.4 %.

End in sight for price dispute between Nestlé and Colruyt, Edeka and Intermarché?

17/04/2018

ColruytEdeka and Intermarché are approaching a deal in their price dispute with Nestlé. The Swiss food manufacturer will make concessions in a new proposal as the retailers’ supplies are dwindling.

Carrefour and E.Leclerc start arms race for urban pick-up locations

17/04/2018

The French e-commerce market has seemingly opened up a new area of competition: Carrefour and E.Leclerc have both opened so-called “drives piéton”, pick-up locations for pedestrians in urban centers.