Asos has come under scrutiny for increasing its CEO’s pay despite notable losses.
- José Antonio Ramos Calamonte, Asos CEO, received a substantial 44% pay rise during challenging times.
- The company cites improved profitability as a rationale for the salary increase, despite significant operating losses.
- Asos faced an 18% drop in full-year revenue, with fierce market competition impacting earnings.
- The decision contrasts with other retailers waiving bonuses amid profit struggles.
Asos has recently become the center of attention for awarding its CEO, José Antonio Ramos Calamonte, a significant 44% pay rise. This decision comes at a time when the company is navigating through a challenging financial landscape. While Asos has highlighted improved profitability under Calamonte’s leadership, the backdrop includes an 18% dip in full-year revenue and operating losses amounting to £331.9 million for the financial year ending September 1, 2024.
The pay package increased Calamonte’s total earnings to £1.17 million over the past year, up from £814,858 the previous year. This package includes his annual salary and substantial bonus payments, with the annual salary alone standing at £716,436. Despite the financial hurdles, Asos attributes the pay rise to strategic successes that have seen adjusted EBITDA reach £80.1 million and a significantly improved free cash flow of £37.7 million, reflecting a £250.7 million improvement from 2023.
The company’s spokesperson has clarified that employee remuneration, including bonuses, is thoroughly evaluated and approved by the board based on industry benchmarks and strategic achievements. They noted that Asos has made significant strides in transforming its business model over the last year, even amid tough market conditions induced by weakened consumer demand and stiff competition from affordable fashion retailers.
The decision contradicts the recent trends among other retailers such as Dr. Martens and Burberry, which have opted to waive leadership bonuses due to underperformance. Similarly, Boohoo Group also decided to cut executive bonuses following shareholder disapproval, and Crew Clothing faced legal issues over a former CEO’s bonus.
Overall, Asos stands firm in its decision, underscoring its progress and improved financial metrics during trying times. The company seems poised to weather these challenges, with a focus on maintaining its competitive edge in the fast-paced fashion retail landscape.
Asos’s strategic leadership decisions highlight their focused adaptation during financial adversity.
