Boohoo gears up for row over chief executive’s £1m pay packet
Fast fashion chain Boohoo is preparing for a potential investor revolt this week over a £1.04m payout to its chief executive.
In a report issued to shareholders, Institutional Shareholder Services (ISS) recommended that investors vote against the group’s proposed remuneration policy.
The advisory group said no explanations were provided by Boohoo for the size of the award to boss John Lyttle, or for boosts to senior executive salaries which ranged from 18 per cent to 30 per cent.
Currently valued at £4.6bn, Boohoo’s share price has risen more than 20 per cent in the last year. It is expected to report a sizeable rise in revenue in its results this week, and will hold its annual general meeting on Friday.
If Boohoo’s market value nears £6bn in the next four years, Lyttle is also in line for another £50m payout. The report from ISS was first reported by the Sunday Times.
The investor summit follows in the wake of a short-seller attack against Boohoo last month, which criticised the firm’s decision to buy out the remaining shareholders of rival Pretty Little Thing (PLT).
Short-seller Shadowfall had criticised the amount of money the retailer was likely to have spent on gathering up the stakes, including that of Umar Kamani, who is the son of Boohoo founder and chairman Mahmud Kamani.
It also questioned the move’s legitimacy, alleging Boohoo had provided a “misleading impression” of its free cash flow position. Shortly before carrying out the transactions, Boohoo raised almost £200m from its own shareholders.
In response to ISS’ recommendations, first reported by the Sunday Times, a spokesperson for Boohoo said Lyttle’s payout was based on the payouts he gave up when leaving his previous role at Primark, which was explained to investors last year.
They added that the rise in executive salaries was comparative to those of similar-sized companies.