Abercrombie & Fitch CEO Has Wings Clipped
Abercrombie & Fitch Co. chairman and CEO Michael S. Jeffries is no longer automatically cleared for takeoff. The cataloger/retailer has amended its employment agreement with him, limiting his personal use of the company’s aircraft, according to documents filed with the Securities and Exchange Commission.
Under the newly announced terms, Jeffries will be required to reimburse the company for personal use of company aircraft when the incremental cost to the company exceeds $200,000. The company will determine the value of Jeffries’ air travel.
If Jeffries’ travel exceeds $200,000 during any fiscal year, he will be required to reimburse the company for all overage. Additionally, the amended eliminates Jeffries’ right to a tax gross-up payment from the company in connection with his personal use of Company aircraft.
To soften Jeffries’ landing, Abercrombie & Fitch will pay him a lump sum of $4 million. If Jeffries voluntarily terminates his employment with the company before his contract expires on Feb. 1, 2014, he will be required to pay back a prorated portion of the $4 million payment.
Direct its most recent fiscal year, Abercrombie & Fitch generated $2.93 billion in net sales, down from $3.48 billion a year earlier. The company’s net income fell from $272.3 million to $254,000 during the same period, as both cost of goods sold and stores and distribution expenses were proportionately higher during the most recent year.
