One more way greedy leadership hurts the bottom line

TIME magazine reports that Abercrombie & Fitch CEO Mike Jeffries is getting paid $4 million to NOT use the company plane for personal reasons.

http://www.time.com/time/business/article/0,8599,1982247,00.html?xid=rss-nation-yahoo

TIME magazine:

"Through the Great Recession, few brands struggled as much as Abercrombie & Fitch, the company that sells preppy, casual clothes to teens and young adults. While other retailers were slashing prices to attract consumers, the company was still pushing $90 pants, and stuck to its "aspirational" marketing campaigns featuring half-naked models. The tone-deaf strategy backfired: in 2009, the company netted just $254,000, essentially running at breakeven, compared to a $273 million profit in 2008 (and a $476 million take during the heady days of 2007). Same-store sales were off 23% last year; between the beginning of 2008 and the end of 2009, Abercrombie's stock price fell 56%. While the stock is up 41% in 2010, and same-store sales have ticked up during the current retail rebound, Abercrombie & Fitch is still buried in a deep hole.

So it would make good business sense — or at least just require common sense — for Abercrombie & Fitch chairman and CEO Mike Jeffries, who in 2008 received $71.8 million in total compensation, according to research firm the Corporate Library, to plow some money back into his company. After all, CEOs around the country have taken drastic pay and perk cuts to better fit the tenor of these tough times. For the good of Abercrombie shareholders, and the company's battered image, Jeffries, named one of the five Highest Paid Worst Performers of 2008 by the Corporate Library (his 2009 compensation has yet to be disclosed), is one guy who could use some scaling back."

Read more: http://www.time.com/time/business/article/0,8599,1982247,00.html?xid=rss-nation-yahoo#ixzz0lMaa0MgE


... just one more way CEO greed hurts the bottom line. Just as I pointed out in LEADING PEOPLE THE BLACK BELT WAY.