The CEO of online fashion giant, ASOS, has received considerable criticism after his pay package rose nearly 44% last year, even as the company suffered significant financial losses. Jose Antonio Ramos Calamonte's total compensation now stands at £1.17 million for the year ending September 1, reflecting a sharp increase from the £814,858 he earned the previous year. This boost was largely fueled by over £376,000 worth of bonus payments linked to performance targets.
Despite these seemingly exorbitant earnings, ASOS disclosed it had slipped even more deeply 'into the red' just days before. The latest report indicated pre-tax losses had ballooned to £379.3 million, up from losses of £296.7 million the preceding year. Alongside these staggering losses, the retailer disclosed challenges with clearing excess inventory, which has been exacerbated due to economic pressures, leading to both financial strain and operational restructuring.
Ramos Calamonte stepped up as CEO amid turbulence within the company, taking on the mantle during its most challenging period since its founding. His role has involved steering ASOS through strategic changes aimed at revitalizing both profitability and overall market performance. The retailer, which boasts more than 24 million active customers, is currently enacting key changes intended to shift the company out of its current downturn.
Official reports show approximately £520 million of stock remains unsold, combined with nearly £100 million written off from its valuation. The company had to announce sales declined 16% over the last year, totaling £2.9 billion, numbers significantly worse than recent forecasts suggested.
It was reported earlier this month, Ramos Calamonte observed “green shoots” of recovery beginning to emerge from the business reformation efforts. His belief seems to align with the company’s commitment to executing substantial growth initiatives alongside cost-saving strategies.
Following his pay increase, pressure on the board has grown, as many are questioning the suitability of Ramos Calamonte's compensation amid widespread austerity. ASOS's spokeswoman clarified, "All employee remuneration is approved by the board and is based on industry benchmarks and achieving strategically important objectives." She presented the company’s narrative on progress made within the last twelve months.
Ramos Calamonte isn't alone; CFO Dave Murray, who joined the company recently, was reported to have received £259,113 during the same period.
Despite the adversity faced, the board has expressed optimism. The spokeswoman remarked: "Despite challenging market conditions, ASOS has made considerable progress to transform the business. Product is positioned strongly and profitability is fundamentally improving, evidenced by positive adjusted EBITDA and significantly improved cash flow."
Considering the current circumstances, the public and shareholders alike remain skeptical of the leadership decisions. Ramos Calamonte's continued presence as CEO will depend significantly on the effectiveness of strategic changes initiated and whether his initiatives will resonate positively with customer engagement and financial performance.
Overall, the situation reflects the complex realities faced by modern retailers, especially those like ASOS, which are trying to balance their profitability and operational restructuring. How these efforts will pan out as the financial year progresses remains to be seen, but as it stands, the road to recovery appears bumpy for this online retail giant.