Boohoo abandons £1m bonus payouts for top bosses who missed yearly targets
The retailer had reportedly come under pressure after revealing the bumper payouts despite the bosses not meeting their bonus targets for the year.
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Your support makes all the difference.Boohoo has turned its back on plans to award its top bosses bonuses worth £1 million, after facing criticism from shareholders in the loss-making fashion chain.
The retailer had reportedly come under pressure after revealing the bumper payouts despite the bosses not meeting their bonus targets for the year.
In its annual report published earlier this year, Boohoo said its co-founders Mahmud Kamani and Carol Kane and chief executive John Lyttle were entitled to an annual bonus of £1 million, made up of cash and share awards.
It came despite reporting a pre-tax loss of £150 million for the year to the end of February, greater than the £91 million reported the previous year, and revenues tumbling by 17%.
The company therefore did not meet its own financial goals for the year, with revenues, adjusted earnings and adjusted cash flow all undershooting its target levels.
It also missed its targets for delivering on environmental measures, international supply chain milestones and IT project goals.
However, Boohoo said it was disregarding its own pay policy because it did not reflect the “excellent work” carried out by its top bosses.
“Using the formulaic outcome alone, the FY24 (2024 financial year) annual bonus out-turn was 0% of maximum,” the report read.
“However, the Remuneration Committee feels that the formulaic outcome is not an accurate reflection of the excellent work carried out during the year to set the business up for future success, nor will it ensure that the management team is motivated and retained throughout the next financial year which will be pivotal for the group’s long-term success.”
But on Tuesday, Boohoo told investors that its executive directors had “opted to waive their entire bonus entitlement” for the year.
It means that without the bonus payments, Mr Kamani will take home about £503,000, Ms Kane £524,000, and and Mr Lyttle £713,000 for the latest year.
The retailer also said it had decided not to implement its new “Boohoo Incentive Plan”, having “engaged with certain shareholders” ahead of its annual general meeting (AGM) next month.
The new scheme had involved combining its annual bonus and long-term incentives into one, replacing the existing incentive system which it said was not “motivational”.
According to reports in The Times, some shareholders had been planning to revolt against the pay plan at its AGM, with one major shareholder said to be “furious” about the change to the bonus scheme.