Boohoo’s newly outlined growth share strategy was received with hesitancy at its general meeting, with 37 percent of shareholders voting against the implementation of the plan.
With the rest on board, the fast fashion group is set to go ahead with the plans anyway, however in a regulatory filing it noted that its Remuneration Committee would reflect on the feedback and engage with shareholders to ensure their views are considered.
Unveiled at the beginning of February, the bonus plan is the third to be rolled out by the company since 2019, and was established in a bid to drive long-term sustainable growth and rebuild shareholder value in light of unprecedented market conditions.
Despite its goals, many of the group’s shareholders have been seemingly unsupportive of the move, which could see Boohoo boss John Lyttle be awarded 50 million pounds.
Boohoo boss to pocket 50 million pounds
Meanwhile, finance boss Shaun McCabe could receive 25 million pounds, and co-founder Carol Kane 20 million pounds.
The rest of the 175 million pound funds would go to staff across the business.
However, not all shareholders were against the strategy.
Mahmud Kamani, executive chairman of Boohoo, and the group’s largest shareholder, said that he “wholeheartedly endorsed” the plan, “recognising the importance of aligning the interests of all shareholders with those of our hardworking boohoo colleagues”.
He added: “The value generated for shareholders would be some 25 times greater than the maximum award of the plan, and I am therefore pleased that it is being implemented."
In order to gain the rewards, which have been divided into five tranches, Boohoo must achieve a 90-day average share price hurdle within an overall five-year measurement period.
It comes as an update to the group’s 2019 Growth Share Plan and 2020 Management Incentive Plan, both of which the committee had decided held “little or no value”, and were no longer operating as an “effective incentive mechanism”.
The two initial plans fell through after the company’s share price saw a drop.
In a regulatory filing, Iain McDonald, chairman of the Remuneration Committee, said: "The Growth Plan was designed with an intention to rebuild substantial shareholder value through the delivery of extremely ambitious targets, and it acts as a powerful retention, recruitment and incentivisation tool for all participants, resolutely aligning their interests with those of our shareholders.
“We followed a detailed consultation exercise with a number of our larger shareholders and we thank all of them very much for their engagement and contributions."