Boohoo Group faced a significant backlash from investors, leading to the retraction of its multimillion-pound bonus payouts and the withdrawal of a vote on its incentive plan.
The fashion retailer, amidst widened losses of £160 million in the past year, intended to grant £1 million bonuses to co-founders Mahmud Kamani and Carol Kane, as well as CEO John Lyttle. However, following investor uproar, Boohoo announced that its executive directors had opted to waive their bonus entitlement.
Several shareholders, including a top-five investor, expressed outrage over the bonuses, considering the company's financial performance. Boohoo's annual report acknowledged that executives were ineligible for bonuses due to missed financial targets. Nevertheless, the remuneration committee decided to proceed with payouts, citing the executives' exceptional performance.
Kamani and Kane were set to receive £1.5 million each, while Lyttle's pay was £1.7 million for the financial year. Additionally, a vote on a new incentive plan, combining annual bonuses and long-term incentives, was withdrawn from the meeting agenda in response to shareholder discontent. Investors criticised the lack of consultation on the proposed incentive scheme and questioned the inclusion of Kamani, who was previously removed from the plan. Boohoo pledged to engage with shareholders on the matter in the future.
This incident marks another confrontation between Boohoo and shareholders over incentive schemes, following a 37% vote against the proposals last year. Amidst these challenges, Boohoo's shares have fallen by approximately 17% in the past year.
