Boohoo has sparked outrage by unveiling plans that would land its top brass a £175million payout if its share price improves.
Bosses at the online fashion firm were accused of shifting the goalposts as their ‘growth share plan’ is the third scheme the group has rolled out in four years.
The two previous plans flopped after Boohoo’s share price tumbled, meaning lofty targets were missed.
Payout: Boohoo bosses were accused of shifting the goalposts as their ‘growth share plan’ is the third scheme the group has rolled out in four years
The latest scheme could hand chief executive John Lyttle £50million, finance boss Shaun McCabe £25million and co-founder Carol Kane £20million.
Samir Kamani, who runs the firm’s Boohoo Man brand and is the youngest son of Kane’s co-founder Mahmud Kamani, could receive £12.5million. The rest of the £175million pot would go to staff across the business.
To unlock the huge payouts, bosses will have to bring Boohoo’s share price back from historic lows and hit a series of targets over the next five years.
The final target, which would see the whole £175million paid, is for Boohoo’s value to top £5billion for a period of more than 90 days.
The fast fashion firm is worth around £600million meaning Boohoo shares would have to rise by around 745 per cent in the next five years.
Hargreaves Lansdown analyst Sophie Lund-Yates said Boohoo’s latest plan shows bosses hope that it will be ‘third time lucky’.
Two previous attempts by the firm to hand executives tens of millions of pounds have backfired.
A plan for Lyttle when he took charge in 2019 would have netted him £50million if the firm’s value passed £5.8billion.
Executive chairman Mahmud Kamani said its latest plan contains ‘extremely ambitious’ targets which would get Boohoo back on track.
The company added that it would create around £4.4billion of extra cash for shareholders in the business – justifying the hefty payouts to bosses.
But Luke Hildyard, of the High Pay Centre, believes the awards should go to the lower-paid staff in manufacturing and other roles.
He said: ‘A website where people buy clothes is hardly making a transformational contribution to the wellbeing of humanity, and managing one does not merit a pay award worth tens of millions of pounds.
‘This happens too often. Boards argue that executives are critical to company performance and need to be incentivised, but then claim that performance has slipped because of circumstances beyond the executives control and that they should be able to shift the goalposts and get the pay outs anyway.’
Boohoo also argued the plan was key to attracting and holding on to talented bosses. Rival Asos has been rocked by turmoil in its top ranks, with its finance boss quitting at the end of last year just a month after being appointed.
The latest scheme could hand co-founder Carol Kane (pictured) £20m
The chairman of Boohoo’s pay committee Iain McDonald said recruitment has become ‘more competitive than ever before’.
It comes after a torrid last three years for Boohoo which has seen billions wiped from its value amid a series of scandals.
In 2020, then Home Secretary Priti Patel ordered an investigation into the company over sweatshop slavery allegations.
One factory in Leicester was allegedly paying workers as little as £3.50 an hour to make clothes for Boohoo’s fashion brand Nasty Gal.
It also faced a backlash a year later when bosses hosted an international suppliers conference in a luxury hotel in Dubai at the height of the Covid-19 pandemic.
Boohoo has been rapped by shareholders and campaigners over fat cat pay and is being probed by the competition watchdog for so-called ‘greenwashing’ – making vague claims which give the impression they take an eco-friendly approach.
And the firm is grappling with a wider backlash among younger shoppers against the fast fashion model and the end of a pandemic-fuelled sales boom.
The company blamed a ‘unique and unprecedented set of macro-economic and market headwinds’ for the need to launch a new bonus plan.
