Boohoo shareholders narrowly approve plan which could hand CEO John Lyttle a £50m bonus
Shareholders at online fashion giant Boohoo Group have narrowly approved a bumper incentive deal which could hand a £50 million bonus to the company’s CEO in the next half-decade.
The new plan will make it easier for chief executive John Lyttle and his top lieutenants to get their bumper payouts.
It had been hailed as a “growth plan” by bosses when they unveiled the idea in January. The hope was that the incentives – which are target driven – would help improve performance. But more than 37% of votes were cast against the incentive scheme when shareholders had their say on Wednesday (8 March).
“The remuneration committee will reflect on feedback gathered throughout the consultation process regarding the growth plan, and will continue to engage with shareholders with regard to the group’s remuneration policy to ensure that shareholder views are considered,” Boohoo said after the result.
To get the full payout, which also includes £25 million for chief financial officer Shaun McCabe and £20 million for co-founder Carol Kane, John Lyttle will have to drive a real turnaround in Boohoo’s share price.
If the company reaches a market value of around £5 billion within the next five years and stays there for around three months the trio, and others, will get the full payout.
It is a more generous offer to the bosses who previously had to grow Boohoo to £6 billion before getting the full payment.
Boohoo is currently worth around £690 million on the London Stock Exchange. Its shares have come down significantly since their peak during the pandemic. They dropped from more than £4 in June 2020 to around 50p today.
Co-founder and executive chairman Mahmud Kamani said: “As Boohoo’s largest shareholder I wholeheartedly endorsed the growth plan, recognising the importance of aligning the interests of all shareholders with those of our hardworking Boohoo colleagues.
“The value generated for shareholders would be some 25 times greater than the maximum award of the plan, and I am therefore pleased that it is being implemented.”