Asos shareholders recently approved a significant new executive pay scheme, the Value Creation Plan (VCP).
- Over 90% voted in favour of the VCP, underlining shareholder support for substantial growth incentives.
- The VCP ties executive rewards to share price performance, requiring a price threshold of £6.70.
- Shareholders also backed amendments to the Long Term Incentive Scheme 2022, with a 99.18% approval rate.
- Asos’s share price saw a decline post-announcement, from £3.61 to £3.40.
Asos has secured shareholder backing for its innovative executive remuneration scheme, the Value Creation Plan (VCP), which aims to align leadership incentives with significant growth achievements. In a decisive move, over 91% of the votes cast during the annual general meeting supported the proposed plan, indicating a strong consensus among shareholders regarding the strategic direction proposed by Asos directors.
The VCP is designed to reward senior leaders based on the company’s stock performance, with a specific target share price of £6.70 necessary for value delivery to recipients. This reflects a strategic emphasis on doubling the share price compared to its level when the plan’s development commenced. The remuneration scheme envisages a maximum annual executive bonus capped at 150% of the base salary, reinforcing a performance-based reward structure.
In addition to the VCP approval, shareholders overwhelmingly endorsed changes to the existing Long Term Incentive Scheme 2022. With a staggering 99.18% in favour, the amendments received almost unanimous support, reflecting shareholder confidence in the revised incentive structures aimed at fostering sustainable development and retention of key talent in the company’s leadership.
However, the announcement of the VCP had an immediate impact on Asos’s share price, which fell from £3.61 to £3.40 following initial disclosures. This decline might suggest market scepticism or caution regarding the plan’s implications or the company’s near-term strategic prospects. Nevertheless, the approval indicates a long-term confidence in the company’s value generation potential.
The strong shareholder backing for Asos’s new executive pay scheme underscores confidence in its growth-oriented strategy despite short-term market reactions.
