Asos’ share price has fallen after it proposed changes to its remuneration policy, which it said better aligns with its “ambitious growth plans”.
The fashion retailer, which is looking to reverse its widening losses, has called a general meeting on 20 August to discuss replacing its long term incentive scheme with a value creation plan.
Shares in the company fell from £3.58 to £3.41-per-share in the aftermath of Friday’s announcement.
Asos told shareholders that it wanted to amend parts of its current remuneration policy “with a rather more geared incentive to further align executive directors and the senior leadership team with the company’s ambitious growth plans”.
Related Story
It said that its directors are proposing to introduce an Asos Value Creation Plan (“VCP”) to “incentivise its senior leaders to deliver exceptional value for shareholders through substantial growth in the company’s share price”.
Asos cautioned that its VCP “will only deliver value to recipients to the extent the share price exceeds £6.70”. This is approximately double the share price when the VCP design work commenced.
The retailer concluded the changes “demonstrates the ambition which the plan seeks to incentivise and reward”.
It comes as Asos reported its pre-tax losses widened to £120m in its half year as sales plummeted 18% amid its turnaround plan.
Retail analyst Nick Bubb said the company has “risked stoking shareholder unrest by announcing that it is moving the goalposts again on director remuneration”.
Click here to sign up to Retail Gazette‘s free daily email newsletter
