Proactive Investors - ASOS (LON:ASOS) management won’t have to meet any diversity targets to achieve their bonus this year and are instead focused on attaining profitability.
For the 2024 financial year, 75% of the retailer’s annual executive bonus scheme will be dependent on adjusted EBITDA targets while the other 15% will be based on meeting stock, margin, and cost targets.
In 2023, the bonus was broken down into 15% revenue targets, 25% adjusted pre-tax profits, 35% adjusted free cash flow and 25% on strategic/ESG measures.
Management failed to receive their bonus in 2023 after missing these targets.
The online retailer said it removed ethical targets from the bonus scheme because its turnaround plan is “what management will be focused on…for the year ahead”.
As part of an overarching diversity scheme, Asos aims to have half of its leadership roles filled by women and 15% occupied by ethnic minorities before 2030.
A longer-term incentive scheme still contains diversity targets and therefore management could miss out on share bonuses in the next three years if these goals are ignored in 2024.
Companies distancing themselves from ESG targets has risen in recent years.
Packaged goods giant Unilever (LON:ULVR) said it would no longer be looking to “force fit” its products with a social purpose, while Shell (LON:RDSa) and BP (LON:BP) have received criticism for pivoting focus to oil and gas instead of the less-profitable renewable energy divisions.
Asos shares are up a little under 1% at 379p on Monday.
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