Big Boohoo bonuses if shares rise substantially
Manchester-based fast fashion retailer Boohoo.com is scrapping its controversial management incentive scheme in favour of a five stage plan to reward its key executives if the share price hits ambitious targets.
To achieve the full £175m rewards to be paid out in Boohoo shares, the company will have to achieve a £5.0 billion market capitalisation and an average share price of £3.95 which would be a 747% increase on yesterday’s closing price of 46.65p.
However, the senior management team of chief executive John Lyttle, finance director Shaun McCabe and director Samir Kamani would be in line for a share of £17.5m if the share price hit the first targeted threshold of 95p, double the current value.
Mahmud Kamani, executive chairman, founder and shareholder of Boohoo, said: “While these are extremely ambitious targets in a changed world, in my view as executive chairman and the largest shareholder it’s absolutely the right thing to do to align the interests of the management team and all of our hardworking colleagues with those of all of our shareholders.”
In 2021 MPs on the Environmental Audit Committee called on Boohoo to change the long-term bonus scheme to link it to improvements in the company’s supply chain.
The present scheme appears to be linked solely to share performance.
Describing itself as “Leading the fashion eCommerce market” Boohoo was founded in Manchester in 2006, in 2017 it acquired PrettyLittleThing and Nasty Gal.
In February 2021, the group acquired the intellectual property assets of UK brands Dorothy Perkins, Wallis and Burton. As at 31 August 2022, the boohoo group had 19 million active customers across all its brands around the world.
The business is under constant scrutiny over working conditions in the UK and overseas.
Only this week protestors disrupted a presentation by Boohoo at Source Fashion, a retail fashion industry conference in London.