// Asos has changed the criteria for its annual executive bonus scheme
// Investors at the online retailer will get a binding vote on the remuneration policy, including the revisions, at the company’s annual meeting next year
Asos has modified the criteria for its annual executive bonus scheme in a move that analysts said reflected the sharply declining fortunes of online fashion retailers, FT has reported.
In a notice discreetly published on its website, the retailer said it was “appropriate” for its remuneration committee to “amend the performance measures and weightings . . . to better align with business priorities [for the current financial year]”.
The weighting for revenue in the current year has been cut from the 30% cited in the company’s annual report, published three weeks ago, to 15%
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Meanwhile, adjusted pre-tax profit has been downgraded from a 30% weighting to 25% while adjusted cash flow now comprises a 35% weighting, up from 15%.
The weighting for strategic and environmental, social and governance considerations was unchanged, although within this category, references to active customer numbers, gross margin and personal objectives were dropped in favour of “cost mitigation”.
The bonus scheme applies to new chief executive Jose Antonio Ramos Calamonte, who succeeded Nick Beighton in June, and whoever is appointed to the post of chief financial officer vacated by Mat Dunn at the end of October.
It can pay out a maximum 150% of base salary and depends on performance against various targets in a single financial year.
It did not generate any payouts in respect of the year to August 2022. A separate long-term incentive scheme uses different metrics and is not being amended.
As is customary across the retail sector, the thresholds that trigger payouts against each of the criteria have not been disclosed.
The changes follow full-year results in October when Calamonte acknowledged that the company needed to shed excess stock and took a provision of up to £130mn to reflect the cost of doing so.
Alongside the results, Calamonte also unveiled his 12-month turnaround plan, which will focus on both a number of “decisive, short-term operational measures to simplify the business, alongside steps to unlock longer-term sustainable growth”.
In response, a spokesperson for Asos said: “The FY23 annual bonus performance measures and weightings have been appropriately revised to better align the framework to the current environment and the delivery of our strategic priorities outlined at full-year results. The level of potential earnable bonus has not changed.”
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