Backlash over Boohoo plan to hand bosses £175m if share price improves
Backlash over Boohoo’s ‘growth share scheme’, with bosses set to hand over £175m if share price improves
Boohoo has had a nosebleed over a controversial plan to hand bosses £175m if the share price improves.
The struggling fast fashion company’s “growth share plan” enraged investors, with nearly four in 10 voting to reject it yesterday.
Despite the backlash, Boohoo is going ahead with the plan, the third top executive bonus plan to be rolled out in four years.
Boohoo’s growth share plan could raise CEO John Lyttle £50 million, finance boss Shaun McCabe £25 million and co-founder Carol Kane (pictured) £20 million
Two previous plans flopped after the company’s stock price plummeted, missing high targets.
The latest plan could net Boohoo boss John Lyttle £50m, finance boss Shaun McCabe £25m and co-founder Carol Kane £20m.
Samir Kamani, who runs the company’s Boohoo Man brand and is the youngest son of Kane’s co-founder Mahmud Kamani, could receive £12.5 million.
The remainder of the £175 million pot would go to staff across the company.
But to unlock the massive payouts, bosses will have to push Boohoo’s share price back from historic lows and meet a series of targets over the next five years.
The ultimate goal of all £175m being paid is for Boohoo’s value – currently around £690m – to rise above £5bn for a period of more than 90 days.
Kamani, Boohoo’s executive chairman, “wholeheartedly” supported the plan despite the backlash.
And chairman Iain McDonald said it would “resolutely align” the interests of bosses with those of shareholders.
But Luke Hildyard, from the High Pay Centre, said the possible payouts under the scheme were ‘free’.
He said the fact that so many independent shareholders voted against the bonus is “conclusive evidence of the overrun.”
Boohoo shares fell 1.3 percent or 0.74 pence to 54.6 pence yesterday.