Asos shareholders have strongly supported a new executive remuneration scheme, aimed at rewarding senior leaders for exceptional growth.
- Over 91% of shareholders voted in favour of the ‘Value Creation Plan’, designed to exceed a £6.70 per share threshold.
- The plan includes a maximum annual bonus of 150% of base salary for executives.
- In contrast, an amendment to the 2022 Long Term Incentive Scheme received an even higher approval rate of over 99%.
- The company’s share price dropped following the initial announcement, signalling cautious investor sentiment.
During the annual general meeting held in London, a significant majority of Asos’s shareholders endorsed the introduction of a new executive remuneration plan, called the ‘Value Creation Plan’ (VCP). This strategic move is intended to reward senior leaders for delivering substantial growth and exceptional value to shareholders.
The plan stipulates that value will only be delivered to executives if the company’s share price surpasses £6.70, which is significantly higher than the share price at the time the VCP was conceived. The VCP thus sets clear expectations for performance, aligning leadership incentives with shareholder interests.
A robust 91.92% of votes were cast in favour of the VCP, while 8.18% of shareholders opposed the proposal. This demonstrates a strong consensus among the shareholders in support of aligning executive rewards with company performance.
In addition to the VCP, amendments to the Asos Plc Long Term Incentive Scheme 2022 were also put to vote, receiving overwhelming support with 99.18% of the votes in favour. Only a small fraction, 0.82%, voted against the changes, highlighting a near-unanimous agreement on this matter among shareholders.
Despite the favourable vote on executive pay, Asos witnessed a decline in its share price from £3.61 to £3.40 shortly after the scheme was announced. This decline reflects a degree of caution among investors regarding the implementation and potential impact of the new pay structure.
The approval of Asos’s new executive pay scheme underscores a strong shareholder mandate to incentivize leadership tied to significant company growth.
