Last Updated May 12, 2010 10:30 AM EDT
The question many apparel-watchers are asking: How does this happen? The answer is, in the usual way public-company executives' pay is determined -- A&F's board of directors approved it. It's not a complete shock, as earlier disclosures described how the board OKed paying Jeffries $4 million to use the corporate jet less. And he got $23.2 million in total pay the year before, when comparable-store sales were plummeting.
But still. Sales went down another 16 percent last year... which apparently rated Jeffries $13 million more.
So let's meet the Friends of Mike who cooked up this crazy pay package that's straight out of the greed-is-good 1980s. The members of A&F's board compensation committee turn out to be a pretty varied bunch, some of whose resumes don't seem to reflect any relevant expertise for running a large public apparel company or setting pay for its chief executive.
- Superagent Ed Limato of private talent mega-agency William Morris Endeavor Entertainment. No doubt he's useful for obtaining pretty faces for A&F advertising shoots. The A&F proxy provides this mystifying note about his role: "Through his long career in the Hollywood entertainment field, Mr. Limato has vast knowledge of popular culture and talent management. The latter in particular provides valuable insights in his role as a member of the Compensation Committee." Huh? So he manages Hollywood talent by... making sure they get paid tons, apparently, a technique he then also applied to A&F's compensation strategy.
- Lauren Brisky is the recently retired vice chancellor and CFO of Vanderbilt University. She's a triple-win from a board-diversity standpoint -- a woman, with a finance background, and hopefully with her finger on the pulse of what A&F's core collegiate audience is wearing. But here's betting nobody at Vanderbilt ever got paid anything like this.
- James Bachmann retired from his job managing the Columbus, Ohio, office of Ernst & Young in 2003. Bachmann "has significant public company accounting and financial expertise," the proxy notes. So he really ought to know better.
- Craig Stapleton is a former U.S. Ambassador to France and the Czech Republic. I am not making this up. "Mr. Stapleton fills a need for international expertise that was identified by the Board in its annual self-evaluation process," the proxy notes. Yet you rarely hear of CEOs abroad being paid this kind of money.