Abercrombie & Fitch has revealed some fresh ideas about plus sizes — and they don’t involve clothing.
CEO Mike Jeffries — who has courted controversy by openly shunning larger-size customers at the teen retailer’s shops — has won a fat new contract with prospects to earn millions more despite his recent dismal performance.
The 69-year-old exec’s employment agreement will be extended by at least a year beyond its Feb. 1 expiration date, with a $1.5 million salary. The new contract provides target incentives worth as much as $6 million and annual bonuses of up to $4.5 million.
Jeffries’ new deal has even awarded him $200,000 for use of the company’s aircraft — an extravagance that had been a sore spot for shareholders in previous years.
Shares of Abercrombie, which were left tattered in the wake of three straight months of sales declines — the result of teens flocking to nimbler, lower-price rivals like Forever 21 and H&M — slipped 2.2 percent, to close Monday at $34.10.
A&F’s shares are down 26 percent over the past year and are one of the worst performers in the sector.
Word of the new Jeffries pact dampened speculation that Abercrombie may be taken private at a premium. The lingering presence of Jeffries at the helm has been a “major stumbling block” for that prospect, activist shareholder Engaged Capital griped in a letter to the company’s board last week.
Engaged Capital’s Glenn Welling said in a Monday letter that he was “disturbed” by the retailer’s announcement, His firm, which owns less than 1 percent of Abercrombie shares, is considering its options.