The online fashion retailer, ASOS has made a strategic decision to revise its executive bonus scheme. The company, which had been known for its commitment to diversity and inclusion, is now placing a stronger emphasis on profitability over diversity targets when it comes to rewarding its top management.
On November 25th, Asos announced that its annual bonus scheme for executives would no longer include diversity targets as a criterion. This move comes after the company reported substantial losses amounting to
nearly £300 million, a stark contrast to the £32 million loss from the previous year. The decline in sales was particularly pronounced in the UK, with a 10% drop overall.
The revised bonus structure will focus on financial metrics such as revenue targets, adjusted pre-tax profits, adjusted free cash flow, and strategic/ESG initiatives.
Specifically, the breakdown for the 2023 bonus was 15% based on revenue targets, 25% on adjusted pre-tax profits, 35% on adjusted free cash flow, and the remaining 25% on strategic/ESG factors. This shift in focus reflects Asos's urgent need to prioritize financial recovery and growth.
The company's leadership has expressed that the coming year will be about taking necessary actions to steer Asos back to a path of growth. Despite this change, Asos maintains its wider diversity goals, aiming for 50% female and 15% ethnic minority representation at all levels of leadership by 2030…
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