Fashion retailer Asos has abandoned diversity targets in its annual executive bonus scheme as it prioritises profitability.
The bonus will reflect factors such as achieving profit targets, an improved share price and profit margins, The Telegraph reported.
In the last financial year, Asos’ annual bonus was based 15% on revenue, 25% on adjusted pre-tax profit, 35% on adjusted free cash flow and 25% on strategic and ESG targets such as diversity and inclusion.
However, this year, three-quarters of the bonus is based on adjusted EBITDA and the remainder is measured against targets including adjusted gross margin and cost to serve.
Asos will include a diversity measure as part of its long-term incentive scheme. It aims to have 50% female and 15% ethnic minority representation at all levels of leadership by 2030.
An Asos spokesperson said the changes to the annual bonus scheme reflect “what management will be focused on delivering for the year ahead” and an emphasis on profitability.
Asos suffered a loss of £297m last year. The changes to the bonus scheme came as the ESG agenda is put under increasing scrutiny.