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)
