Asos has attributed the significant pay rise of its CEO José Antonio Ramos Calamonte to “improved profitability” under his leadership.
- Despite Asos’s operating losses reaching £331.9m, the CEO’s remuneration increased by 44%, totalling £1.17m for the year.
- The etailer’s revenue dropped by 18% to £2.9bn due to reduced consumer demand and competitive challenges.
- Asos claims strategic achievements in profitability and cash flow improvements justify the pay decision.
- Other retailers, like Dr Martens and Burberry, have opted to forgo executive bonuses amid financial underperformance.
In the recent financial year ending 1 September 2024, Asos made a controversial decision to raise CEO José Antonio Ramos Calamonte’s annual pay by £300,000, bringing his total earnings to £1.17m. This decision has sparked discussions as it comes despite the company’s substantial operating losses, which have amounted to £331.9m. An Asos spokesperson stated that employee remuneration, including bonuses, is regulated by the board and aligns with industry standards based on achieving strategic goals.
The CEO’s pay package, according to Asos’s annual report, is made up of a salary of £716,436 and bonuses totalling £376,801. This includes a notable annual bonus of £361,585. These figures have been defended by the company as being reflective of the improved profitability achieved under Calamonte’s leadership, despite the broader financial difficulties faced by the company.
Asos has encountered an 18% decline in full-year revenue, bringing it down to £2.9bn. This downturn has been attributed to weakened consumer demand and “tough” competition from other fast fashion etailers and online resale platforms. The loss before tax has stood at £379.3m, contrasting with £296.7m reported the previous year. However, the company argues that it has made significant progress in transforming its business, citing a strengthened product position and improved adjusted EBITDA of £80.1m, even though this is 44% lower year-on-year.
Additionally, Asos has highlighted a substantial improvement in free cash flow, which reached £37.7m, showing a £250.7m increase compared to 2023. This improvement in cash flow is considered a positive result of the strategic measures implemented over the past 12 months.
The remuneration decision for Asos’s CEO is notable, particularly when juxtaposed with other retail brands like Dr Martens and Burberry, which have chosen to waive executive bonuses due to underperformance. In a related incident, Boohoo Group also faced criticism and subsequently cancelled executive bonuses.
Asos’s decision to increase its CEO’s pay, despite financial losses, remains controversial amidst a challenging retail climate.
