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Abercrombie & Fitch will now longer allow CEO Mike Jeffries to use the company aircraft as much as he wants for personal trips.
Now, Jeffries will have to pick up the tab for any personal use that exceeds $200,000.
In addition, the company will no longer pick up the tax tab for Jeffries personal plane privileges.
Don’t shed any tears for Jeffries, however. The company will pay him a lump sum of $4 million to make up for the new airplane restrictions. He’ll have to pay back a portion of the $4 million if he leaves without good reason before his contract expires in 2014.
Last year, I wrote a series of stories about executive compensation, and Jeffries’ lavish perks, salary and bonus stood out, as did the board's effusive words of praise for his “visionary” leadership.
While Jeffries did reinvent the company, he has not effectively managed the recession. He has flip-flopped completely on his “discounting hurts brand equity” philosophy and the company’s same store sales in 2009 were some of the worst in the retail industry.
In fiscal 2009, company same store sales fell 23%. Total sales declined 15.9% to $2.9 billion. Net income plunged 99% to $0.3 million.
Abercrombie owns industry competitor Hollister, in addition to the Abercrombie & Fitch, Abercrombie and Gilly Hicks chains.