Boohoo execs bend to shareholder opposition over bonuses

Directors of the already-under-pressure fashion giant Boohoo Group could have faced hostility from shareholders at its AGM on 20 June.

The reason? A revolt over management bonuses at a time when the group is judged to be a serious underperformer. 

The online fashion retailer, whose brands include Boohoo, Prettylittlething, Karen Millen and Debenhams, had wanted to award certain directors “millions of pounds” in bonuses despite widening losses, according to The Times newspaper. 

But a stock exchange announcement late on Tuesday said it has “decided to withdraw Resolution 3 from the agenda of the Annual General Meeting”.

It added that it had “engaged with certain shareholders regarding Resolution 3 and has decided not to implement the Incentive Plan at this time. The company will consider further engagement with shareholders on this matter in the future”.

And it said the “executive directors have also opted to waive their entire bonus entitlement for the financial year ended 29 February 2024”.

It’s a rare example of a company responding fast to shareholder concerns.
 
The Tines had earlier said that among those befitting the most from the original plan would have been co-founders Mahmud Kamani and Carol Kane and chief executive John Lyttle, with expected £1 million payouts each.

Although the company acknowledged in its latest annual report that the three executives were not eligible for a bonus after financial targets had been missed, it’s claimed Boohoo’s remuneration committee had agreed to a payout anyway as it said it felt “that the formulaic outcome is not an accurate reflection of the excellent work carried out during the year”.

The committee had agreed to pay annual bonuses of half of the maximum to Lyttle and two-thirds of the maximum to Kamani and Kane, The Times had said.

The newspaper quoted one of the firm’s biggest shareholder complaining about this and said several leading investors were understood to be ready to vote against the fashion retailer’s new long-term incentive plan for executive directors.