Boohoo chief lands £650,000 bonus despite the fashion giant swinging into loss
The CEO of online fashion giant Boohoo Group has been handed a more than £650,000 bonus despite the company swinging into a loss and seeing its share price lose nearly half its value in a year.
John Lyttle took home a £1.35 million pay packet in the year to February. It was made up of his £651,000 salary, and an annual bonus also amounting to £651,000, or 100% of his base wage.
Boohoo’s owner, Mahmud Kamani, who co-founded the firm in 2006 and is estimated to be worth around £675 million, also enjoyed an annual bonus worth 100% of his salary. Kamani took home £1 million last year.
In March, shareholders narrowly approved a new bumper incentive deal which could see Lyttle earn a £50 million bonus over the next five years provided he led a significant turnaround in Boohoo’s share price.
The firm said the share price targets were “realistic” but “very stretching”, and “provide a real incentive for management to return Boohoo to growth and value creation”.
It comes as the firm’s share price has collapsed in recent years, plunging by more than 45% in the past year.
Furthermore, Boohoo swung to a loss of almost £91 million from a profit of £7.8 million the prior year, after sales slipped by more than a 10th.
The retailer was affected by rising costs, including shipping, staffing and energy, as well as shoppers returning to the high street.
However, Boohoo said it “considered at great length” the group’s financial performance and “determined that [it was] not reflective of the overall performance of the management team during the financial year.”
It added: “The committee recognises the strong performance of management and successful execution of the cost reduction programme at a pivotal time for the business, which provides a platform for future growth.”
The directors’ annual bonus targets are based 30% on revenue, 45% on profits, 15% on sustainability measures and 10% on UK manufacturing and international supply chain milestones.
It means that a quarter of Lyttle’s bonus, or around £163,000, was granted based on his performance in making the group more fair and sustainable.
Boohoo owns a number of fashion brands including Oasis, Warehouse, Karen Millen and Pretty Little Thing, which was founded by Umar and Adam Kamani, the sons of Mahmud Kamani. Umar Kamani recently announced he was standing down as CEO of Pretty Little Thing to build new brands.