The top bosses at fast fashion giant Boohoo will now not receive bonuses of £1m after shareholders reacted angrily to the plans.
Last week, City A.M. reported that the Manchester-headquartered company was proposing to hand three of its top executives a £1m bonus each despite its losses swelling to almost £160m during the latest financial year.
Co-founders Mahmud Kamani and Carol Kane were to be 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 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.
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”.
Over the weekend it was reported that shareholders in Boohoo planned to revolt against the pay award at its annual general meeting in June.
One top-five shareholder told The Times that they were “furious” that bosses had received bonuses after revenue had fallen by 17 per cent.
Following the reports, Boohoo issued a statement to the London Stock Exchange stating that its executive directors have opted to waive their entire bonus entitlement for the year to February 29, 2024.
It has also pulled a vote on its new incentive plan from the agenda of its annual general meeting.
The remuneration committee had been proposing to “simplify” its policy by replacing the existing annual bonus and performance share plan with one single incentive, the Boohoo Incentive Plan.