Abercrombie CFO Abruptly Resigns

The announcement came a day after an apparently unrelated regulatory filing in which the company disclosed a settlement that slashed its chief exec...
Stephen TaubApril 14, 2005

Abercrombie & Fitch announced that Susan J. Riley has resigned as chief financial officer of the New Albany, Ohio-based apparel company for family reasons and will return to her home in New York. President and chief operating officer Robert Singer will assume Riley’s responsibilities on an interim basis while the company searches for a successor.

“We appreciate the contributions that Sue has made to A&F and we wish her well,” said chairman and chief executive officer Michael Jeffries, in a statement.

The announcement came a day after a regulatory filing in which the company disclosed that in settling shareholder litigation, it had agreed to slash Jeffries’s compensation and to implement a number of governance changes.

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Riley’s resignation and the settlements don’t appear to be related. Nonetheless, jittery investors knocked down Abercrombie’s share price by about 2 percent on Wednesday.

The litigation stemmed from a February 2002 deal that promised Jeffries monthly payments for life if he retired on or after December 31, 2008, according to MarketWatch. These payments worked out to about half of his final average compensation.

Under the 2002 deal, Jeffries was also to receive a “career share” award of one million shares that would vest on December 31, 2008. Under the settlement, he must hold them for one year after his retirement.

In addition, under the settlement Jeffries’ “stay bonus” will be halved to $6 million, he will not receive any stock options in 2005 and 2006, and in subsequent years he will receive options only at the discretion of the compensation committee.

Abercrombie also agreed to review its corporate governance practices and procedures; to ensure that a majority of the members of the compensation committee were not members when Jeffries’ 2002 pay arrangement was made; to retain independent counsel and an independent compensation expert; to expense stock-option compensation; and not to nominate directors who do not meet New York Stock Exchange standards for director independence.