Boohoo hands top bosses bumper bonuses despite losses nearing £160m
The co-founders and chief executive of Boohoo received a £1m bonus despite the fast fashion giant’s losses swelling to almost £160m during its latest financial year.
Co-founders Mahmud Kamani and Carol Kane have been handed the bumper pay packet alongside chief executive John Lyttle.
The bonus was made up of £300,000 in cash and £700,000 in shares in the Manchester-headquartered group, which includes brands such as PrettyLittleThing and Debenhams.
Revealed in Boohoo’s annual report, the bonuses come after the group revealed losses of £159.9m as its revenue fell by 17 per cent. Boohoo also lost more than £90m in the prior financial year.
According to Boohoo’s own remuneration policy, the three executives are not eligible for a bonus because of the financial performance of the group.
Boohoo disregards pay policy to award £1m bonuses
However, in the report, Boohoo’s remuneration committee said it “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”.
As a result, the committee agreed to pay annual bonuses of 49.1 per cent of the maximum to Lyttle and 67.1 per cent of maximum to Kamani and Kane.
Kamani’s total pay for the financial year was £1.50m while Kane’s was slightly higher at £1.52m. Lyttle’s total pay stood at £1.7m.
By comparison, Lyttle took home a bonus of more than £650,000 in the prior financial year and had a total pay packet of £1.35m. Kamani took home £1m in the prior year as well.
Boohoo has also outlined a “refreshed approach” to incentivising its executive directors and senior management, “in order to ensure that the key drivers and talent are appropriately motivated and remain in place to deliver future growth”.
The remuneration committee is proposing to “simplify” its policy by replacing the existing annual bonus and performance share plan with one single incentive, the Boohoo Incentive Plan.
The proposal will be put forward to shareholders at the forthcoming annual general meeting.
The Boohoo Incentive Plan will combine the existing annual bonus and LTIP into one single incentive plan, with a “blend of time- and performance-based awards which provide clearer line of sight for participants and a more effective retention tool, while maintaining a strong link to shareholder value creation through share deferral”.