Boohoo is confronting a rebellion from its shareholders due to its intention to award substantial bonuses to its executives, despite the company recording losses in their yearly financial report.
The company has come under fire for proposing bonuses totaling £1 million in its annual report, while not achieving its profit goals.
A group of investors in the company have expressed their intention to oppose the plan to grant hefty bonus payments to co-founders Carol Kane and Mahmud Kamani, in addition to CEO John Lyttle, during the upcoming annual general meeting in June, as reported by The Sunday Times.
The proposed bonus package includes £300,000 in cash and another £700,000 in Boohoo shares, according to City A.M.
A dissenting shareholder, quoted by The Times, labeled the executive bonus scheme as “outrageous” and criticized the lack of shareholder engagement regarding the new long-term incentive plan.
This controversial bonus news follows Boohoo’s recently reported losses, which ballooned to close to £160 million earlier in the month, amid challenging economic conditions characterized by inflation and a decrease in consumer purchasing power.
In the twelve months leading up to February 29, the company saw a 17% decrease in sales to £1.46 billion, attributing this drop to a strategic pivot towards profitability in a difficult business climate. The company’s revenue has also been affected by its shift towards a marketplace model that relies purely on commissions.
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