Boohoo bosses in line for £150m bonus as part of incentive plan | Business


>

The bosses of Boohoo are in line for a £150m bonus if shares in the online fashion retailer rise by two-thirds over the next three years.

Business has boomed at Boohoo, which owns brands including Nasty Gal, Pretty Little Thing, Coast and Karen Millen, since floating in 2014 and has surged during the coronavirus lockdown.

The company said on Friday its remuneration committee had created a new long-term incentive plan to “ensure that the group’s leadership team is motivated” and the “continuation of the exceptional levels of performance that [Boohoo] has delivered since IPO [initial public offering]”.

Under the scheme, key top executives will share a maximum payout of £150m if Bohoo’s market value can be increased by 66% from £4.54bn as measured on 16 June to £7.55bn by 17 June 2023. At the lower end of the scheme, if the market capitalisation reaches £6.29bn at the end of the three years, the payout pot will be £50m. To achieve the maximum target, Boohoo’s sales will need to increase at an 18% average growth rate over the next three years.

Participants in the scheme include the co-founders, Mahmud Kamani and Carol Kane, who will each receive £50m or a third of the payout, and the chief financial officer, Neil Catto, who will get 6.67%.

A spokesman for the company said this was the first time Kamani, who is group executive chairman, and Kane, an executive director, had participated in a long-term incentive scheme since the business was floated in 2014.

Also included in the plan is Samir Kamani, the son of Mahmud and chief executive of the menswear brand boohooMAN, who is in line to receive 16.67% of the bonus pot.

The remaining 10% is to be used to incentivise other key individuals in the wider management team, with no one person to receive more than 3%.

While the company said it had consulted on the plan with Zeus Capital, the group’s nominated adviser, and considered “the terms of the plan are fair and reasonable in so far as the group’s shareholders are concerned”.

Boohoo is breaking with the UK corporate governance code and is electing not to put the plan to a shareholder vote. The company says under two different sets of company rules, the QCA corporate governance code and AIM rules, a vote is not necessary.

“The remuneration committee has undertaken some shareholder consultation and taken on board feedback received,” the company said. “The committee believes that the interests of shareholders will be best served by granting the awards immediately to the recipients without recourse to a shareholder vote, which will ensure that they are immediately incentivised to deliver stretching share price growth for the benefit of all Boohoo’s shareholders.”

The bonus plan is separate to the one the company created for the chief executive, John Lyttle, when he was poached from Primark in 2018. Lyttle will receive a £50m bonus if the company’s market value reaches £6bn by 2024.



Source link

Retail News Subscribe – One mail per day with summary

Enter your email address:

Delivered by FeedBurner

SUBSCRIBE

Enter your email address:

Delivered by FeedBurner

Safe content check

Affiliate Declaration

www.askwebman.com (askwebman.com) is a participant in the Amazon Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.in.

In addition to askwebman’s participation in Amazon’s program, askwebman.com also participates in a number of other affiliate programs. That means when someone clicks on an affiliate link and purchases a product,askwebman.com receives a small commission.

This commission does not cost you anything, nor does it affect our judgement when it comes to selecting which products we showcase in our content.

 

Product categories

New Products update – One mail per day

Enter your email address:

Delivered by FeedBurner

Retail News update – One mail per day

Enter your email address:

Delivered by FeedBurner