Society

Message from Abercrombie & Fitch Shareholders: Executives Are Overpaid

| by Sarah Fruchtnicht
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The majority of shareholders at Abercrombie & Fitch voted against executive pay packages in June. At this year’s annual shareholder meeting, only 19 percent were in favor of executive pay packages, which is down from 23.7 percent last year  a clear sign that investors think executives are being overpaid.

Buzzfeed reported on the June 21 regulatory filing, but the shareholder vote is nonbinding. The company could go ahead with the executive pay plans despite disapproval from investors. What that would mean to Abercrombie stock, however, is unknown. The company’s stock fell 9.1 percent this year to about $43.65 a share.

CEO Mike Jefferies 2012 salary was $8.16 million. Analysts at Glass Lewis put Jeffries on a list of the top 25 most overpaid executives on the Standard & Poor’s 500 for the last three years.

Ahead of the last week’s meeting, Glass Lewis analysts said executive pay at Abercrombie “has been deficient in aligning pay with performance,” adding “a properly structured pay program should motivate executives to drive corporate performance, thus aligning executive and long-term shareholder interests. In this case, the company has not implemented such a program.”

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Maybe it has something to do with the unflattering image Jefferies painted of the clothing brand, which refuses to offer any sizes above large, and the subsequent backlash from the public. Earlier this year a writer reminded the world of a Salon interview Jefferies gave in 2006 when he admitted the brand is exclusionary.

"[Jeffries] doesn't want larger people shopping in his store, he wants thin and beautiful people," Robin Lewis, co-author of “The New Rules of Retail” told Business Insider this year. "He doesn't want his core customers to see people who aren't as hot as them wearing his clothing. People who wear his clothing should feel like they're one of the 'cool kids.'"

A plus-size blogger created mock Abercrombie ads titled “Attractive & Fat.”

An aspiring filmmaker in Los Angeles recently put together a film of him handing out Abercrombie clothes to the homeless on Skid Row after he learned that instead of donating unused clothing to the needy the company burns it.

Sources: BuzzFeed, Huffington Post