Boohoo facing 'sizeable' revolt over executive bonuses - report

28th May 2024 09:28

(Sharecast News) - Boohoo is reportedly facing a potential investor revolt over plans to pay out millions in executive bonuses at its June annual general meeting.

According to The Times, the fast-fashion online retailer - which owns brands including Karen Millen and Oasis, among others - plans to pay £1m each to executive chair Mahmud Kamani, co-founder Carol Kane and chief executive John Lyttle.

This is despite full-year losses widening to £159.9m in the year to 28 February from £90.7m a year previously. Revenues fell 17% to £1.46bn, while net debt rocketed to £95m.

The company acknowledged in its annual report that none of the executives were eligible for bonuses after financial targets were missed.

But the remuneration committee subsequently agreed the payouts as, The Times reported, it felt "the formulaic outcome is not an accurate reflection of the excellent work carried out during the year".

One unnamed top five shareholder told the newspaper they were "furious". The Times said "several" leading investors planned to vote against the payouts as a result at the AGM on 20 June, and would also vote against a new long-term incentive plan.

Investors are understood to be unhappy that the proposed scheme has not been discussed with shareholders first. One said it was "outrageous" they had not been consulted.

Boohoo declined to comment on the report.

Kane, who is an executive director, co-founded Boohoo in 2006 with Kamani. The retailer thrived during the pandemic, but since then it has been hit by customers returning to shops as well as the cost of living crisis.

As at 1015 BST, shares in the AIM-listed firm were up 1% at 35.02p.

Dan Coatsworth, investment analyst at AJ Bell, said: "Boohoo never seems to do itself any favours from a governance perspective. The fast fashion company has faced criticism over its supply chain and greenwashing claims during a scandal-hit stay on the stock market.

"Now reports suggest it could face major shareholder opposition to plays to rewards [Kane, Kamani and Lyttle] with sizeable bonuses despite the business racking up losses.

"The stage is set for a sizeable revolt at the AGM."