Interactive Investor

Has ASOS got salaries right in pivotal period of its turnaround?

After a terrible three years during which its share price has plunged by over 90%, bosses at the fast fashion firm face shareholders next month. They will decide if these incentives can help revive the business.

26th January 2024 08:22

by Graeme Evans from interactive investor

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New incentive targets have been put in place by ASOS (LSE:ASC) as the fast fashion chain seeks to ensure that its pay packages are more closely aligned with its turnaround strategy.

The performance criteria for chief executive José Antonio Ramos Calamonte’s annual bonus and the vesting of three-year long-term incentives will be tied to the company’s earnings recovery rather than the usual three or four benchmarks.

The FTSE All-Share business, which has not publicly disclosed the targets, said the next year is pivotal to its recovery and that an incentive structure “linked to robust, relevant financial and strategic performance metrics is right for us at this time”.

The chief executive’s maximum bonus opportunity is £1.1 million based on 150% of his £728,000 salary, while the grant of long-term incentives equivalent to 250% of salary could generate £1.8 million. ASOS holds its AGM on 7 February.


When: 2.30pm, Wednesday 7 February.

Where: Greater London House, Hampstead Road, London, NW1 7FB.

How to participate: The deadline for proxy voting instructions is 2.30pm, Monday 5 February. Shareholders can follow the meeting on the company’s website but they will not be able to speak, ask questions or vote via the webcast. More AGM details can be found here.

Who’s in the chair? Jørgen Lindemann, who was appointed in August 2022, is chief executive of the Swedish entertainment streaming service Viaplay.

How did the company do in the year to 3 September? Total sales declined by 11% to £3.5 billion, with the fall accelerating to 15% in the second half. An adjusted loss of £70.3 million reflected weak consumer sentiment and high inflation alongside the cost of its restructuring programme. A bottom-line loss of £296.7 million compared with £31.9 million the year before and included stock write-offs worth £133.2 million as well as property related costs. 

How have shares performed? Down 31% at 449.8p (380.4p on Thursday).

How much is the boss paid? The salary of José Antonio Ramos Calamonte, who was appointed chief executive in June 2022, has been increased for this year by 4% to £728,000. His total remuneration for 2022/23 amounted to £814,775 after no bonus was paid to executive directors for the year. Whilst progress was made against strategic measures, the financial metrics of the bonus scheme were not met.

How are variable pay targets changing? The maximum bonus opportunity remains as 150% of salary, with 75% of the award now determined by a single financial measure of adjusted earnings less capital expenditure. The remaining 25% will be measured against strategic targets such as closing stock and adjusted gross margin. For 2024’s grant of shares under the long-term incentive scheme, performance will be measured entirely on adjusted earnings. This is a change from the usual three or four measures and reflects the strategic focus on returning the business to profit.

Remuneration committee chair Mai Fyfield said: “This next period is pivotal in the turnaround of the business, and the committee firmly believes that an incentive structure linked to robust, relevant financial and strategic performance metrics is right for us at this time.”

What’s the view of voting agencies? Given the company's depressed share price, Glass Lewis warns of the potential for windfall gains following the grant of 2024’s long-term incentive shares at a maximum 250% of base salary. It also flags the use of a single performance metric, which may not reflect broader performance. However, the agency recommends shareholders vote in favour of the annual remuneration report. It notes the company’s assurance that outcomes will be reviewed in the context of the wider business and share price performance prior to the confirmation of any vesting.

How did last year’s AGM go? The annual remuneration report was approved with 97.23% of votes in favour, while the new three-year remuneration policy was backed with 98.95% support.

How’s the company doing on diversity? There is 50% female board representation, including in a senior role. The company also meets the Parker Review target to have at least one director from an ethnic minority.


When: 11am, Wednesday 7 February.

Where: 121-141 Westbourne Terrace, Paddington, London W2 6JR.

How to participate: Basic AGM information is available on the investor section of the Future (LSE:FUTR)website. Shareholders wanting to know the meeting’s start time, more about voting arrangements or details of the resolutions need to go to page 176 of the annual report to view the Notice of AGM. This gives the meeting date as 2023 rather than 2024. Shareholders reviewing the result of last year’s AGM will need to cross refer to 2022’s annual report to know the resolutions each number refers to. Proxy voting instructions should be returned no later than 11am, Monday 5 February. 

Who’s in the chair? Richard Huntingford, who has held the role since 2018, served as chief executive during a 20-year career at media company Chrysalis.

How did the company do in the year to 30 September? Revenues of £788.9 million were 4% lower, impacted by a 19% organic decline for its US operation and 4% fall in the UK. Adjusted operating profits declined 6% to £256.4 million and pre-tax profits by 19% to £138.1 million, with adjusted earnings per share down 14% to 140.9p a share. The company is paying a final dividend of 3.4p a share on 13 February, an increase of 21% on a year earlier.

How have shares performed? Down 31% at 889p (717.5p on Thursday).

How much is the new boss paid? Jon Steinberg, who joined Future from Altice USA’s News & Advertising division, was appointed chief executive in April on a salary of £700,000. This is 17% higher than the sum paid to predecessor Zillah Byng-Thorne, an increase that takes into account the company switching its long-term incentive scheme from a value creation plan (VCP) to a more conventional performance share plan. Future pointed out his overall remuneration package is positioned approximately half-way between the median and upper quartiles of UK peers. His salary increased in December by 4.3% to £730,000. 

What did he receive for the 2022/23? Steinberg’s total remuneration for the initial period of his employment amounted to £559,000, including his relocation allowance. Steinberg waived his entitlement to an annual bonus award worth up to £700,000, although in the event the company missed its annual operating profit target representing three-quarters of the pay-out, and did not go through a formal process of assessing Steinberg’s individual performance element.

What about the pay of his predecessor? Byng-Thorne, who served as chief executive from 2014 and left the board in March, received £324,000 in relation to basic salary and other benefits. She was initially on garden leave until December 2023 but July’s appointment as executive chair of M&C Saatchi meant her departure date was brought forward to 31 August. Future removed her “good leaver” status, meaning she forfeited outstanding VCP awards.

How did last year’s AGM go? The company resubmitted its remuneration policy for approval after the previous year’s annual pay report did not get the required 50% shareholder support. Concerns in 2022 included the structure of the VCP, which was open to all employees and capped at a total pot of £95 million each year. The new policy, which included a   switch to a market-standard long-term incentive plan, was approved with 92.75% of votes in favour when excluding abstensions. The annual remuneration report got 83.01%.

What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report.

How’s the company doing on diversity? Recently announced board changes mean female representation is set to be 44%, including in a senior position, with one director from an ethnic minority background.

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