Through the Great Recession, few brands struggled as much as Abercrombie & Fitch, the company that sells preppy, casual clothes to teens and young adults. While other retailers were slashing prices to attract consumers, the company was still pushing $90 pants, and stuck to its "aspirational" marketing campaigns featuring half-naked models. The tone-deaf abercrombie fitch backfired: in 2009, the company netted just $254,000, essentially running at breakeven, compared to a $273 million profit in 2008 (and a $476 million take during the heady days of 2007). Same-store sales were off 23% last year; between the beginning of 2008 and the end of 2009, Abercrombie's stock price fell 56%. While the stock is up 41% in 2010, and same-store sales have ticked up during the current retail rebound, Abercrombie & Fitch is still buried in a deep hole.
So it would make good business sense - or at least just require common sense - for Abercrombie & Fitch chairman and CEO Mike Jeffries, who in 2008 received $71.8 million in total compensation, according to research firm the Corporate Library, to plow some money back into his company. After all, CEOs around the country have taken drastic pay and mbt shoes to better fit the tenor of these tough times. For the good of Abercrombie shareholders, and the company's battered image, Jeffries, named one of the five Highest Paid Worst Performers of 2008 by the Corporate Library (his 2009 compensation has yet to be disclosed), is one guy who could use some scaling back. (See Time's photos of stores that are no more.)
The first paragraph of an April 13 SEC filing suggests that Jeffries is taking a positive step toward that end. According to the yves saint laurent, no longer will the company provide unlimited payments for the CEO's personal travel on the company jet. Instead, Abercrombie will cap its reimbursements for the CEO's personal travel at $200,000; still a pretty, and wow gold, perk, but at least it's less egregious than before. In 2008 alone, Jeffries' personal travel cost Abercrombie $1.3 million. Before giving Jeffries any credit, however, just keep reading. Turns out that in exchange for amending his employment contract and eliminating this perk, ed hardy clothing will give Jeffries, whose employment contract runs through 2013, a $4 million lump-sum payment. That's right, the CEO of embattled Abercrombie & Fitch, one of the worst-performing brands of the recession, in no small part due to his management decisions, is actually getting paid a sum most people could only dream of just to stop using the company plane as a personal plaything. Who knew corporate self-sacrifice could be so rewarding?