Fast fashion retailer Boohoo Group plc has reversed its decision to seek investor approval for £1 million in bonuses for co-founders Mahmud Kamani and Carol Kane, along with chief executive John Lyttle.
This change follows significant investor backlash, with many preparing to oppose the plan at Boohoo’s annual general meeting on June 20. The company reported wider full-year losses of £160 million for the year ending February 28, compared to £90.7 million the previous year. Revenues fell 17% to £1.46 billion, while net debt soared to £95 million.
Boohoo’s annual report acknowledged that the executives were not eligible for bonuses due to missed financial targets. However, the remuneration committee initially approved the payouts, believing the formulaic outcome did not accurately reflect the executives’ excellent work during the year.
One unnamed top-five shareholder expressed fury to the Times newspaper, and several other leading investors planned to vote against the bonuses and a new long-term incentive plan. Investors were particularly upset that the proposed scheme had not been discussed with shareholders beforehand, with one calling it “outrageous.”
On Tuesday afternoon, Boohoo issued a statement announcing that, after engaging with “certain shareholders,” it had decided not to implement the incentive plan. The three directors waived their “entire bonus entitlement.”
Carol Kane, an executive director, co-founded Boohoo with Mahmud Kamani in 2006. The retailer thrived during the pandemic but has since struggled due to customers returning to physical stores and the cost-of-living crisis.
Dan Coatsworth, an investment analyst at AJ Bell, commented, “Boohoo never seems to do itself any favours from a governance perspective.” He noted that the company has faced criticism over its supply chain practices and greenwashing claims and now faces potential major shareholder opposition to rewarding Kane, Kamani, and Lyttle with significant bonuses despite the company’s losses.
