Abercrombie & Fitch has negotiated a settlement to a shareholder derivative suit alleging excessive CEO pay for up to $2.78 million in attorneys’ fees and an agreement to make a series of governance-related changes:
Abercrombie agreed to appoint a chief ethics and compliance officer, tie executive pay more closely to performance, bolster anti-corruption compliance training, and limit access to nonpublic data to Jeffries’ partner and other third parties, among other provisions, court papers show.
The suit was filed in the wake of the company’s failed 2013 say-on-pay vote. In March, prior to the suit being filed, the company announced a number of changes to the executive compensation program to address shareholder concerns.
Plaintiffs’ compensation-related demands included: (i) having the chair of the compensation committee meet at least annually with the company’s 10 largest shareholders to discuss executive compensation matters; (ii) making 100% of the CEO’s long-term incentive award dependent on the achievement of performance conditions; (iii) subjecting annual and long-term incentive awards to multiple challenging performance metrics including some non-performance metrics; and (iv) removing language allowing the company to make adjustments to performance metrics to exclude certain costs.