Asos has reportedly scrapped a policy designed to award annual director bonuses based on diversity targets.

According to The Telegraph, the company has amended its criteria so that the focus is shifted towards its profit goals.

For the year ended 3 September 2023, the retailer's annual bonus was based 15 per cent on revenue, 25 per cent on adjusted profit before tax, 35 per cent on adjusted free cash flow, and 25 per cent on strategic and ESG measures.

The strategic and ESG element was measured on DEI - female and ethnic minority leadership goals - stock turn and cost mitigation performance.

In its latest financial results, the company said that while it had made some progress against its strategic measures, it would not be paying out bonuses to executive directors because its financial metrics were not met.

The online fashion retailer recorded annual pre-tax losses of £296.7 million for the 12-month period , blaming its poor results on a challenging market backdrop of “weak consumer sentiment” and higher inflation.

Asos said that adjusted loss before tax hit £70.3 million across the year compared to profits of £22 million in 2022.

The figures were also driven by the retailer’s attempts to improve profitability and increase financing costs through its 'Driving Change' agenda.

Asos chief exec Jose Antonio Ramos, who was appointed in 2022, revealed a 12-month turnaround plan last October focused on reducing costs and improving operating performance.

When he first joined the business last year, the Asos boss warned that the organisation simply had too much stock, which ultimately eroded its profitability and "destabilised its balance sheet".

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