Yahoo News:
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 perk cuts 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 filing, 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 unnecessary, 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, Abercrombie 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?
Abercrombie's move has corporate-governance experts shaking their heads. "Most companies have the message that they are eliminating pay perks, not giving the guy cash to eliminate the perk." says Eleanor Bloxham, CEO of the Value Alliance, an advisory firm. "What's been lost in all of this is minimal human common sense." And after so many missteps, you can't help but wonder if Abercrombie will ever get it back. "I just thought, What are they thinking? Really?" says Douglas Park, a Silicon Valley–based consultant. "Customers aren't happy with them right now. Investors aren't happy. You have to wonder what is going through their minds." (See how Americans are spending now.)
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