Boohoo CEO takes £650,000 bonus despite fashion giant making £91m loss
The chief executive of Boohoo has been handed a £650,000 bonus despite fast-fashion giant slumping to a loss of over £90m.
John Lyttle took home a £1.35m pay packet in the year to February, the group’s annual report has revealed.
It was made up of his £651,000 salary, and an annual bonus also amounting to £651,000, or 100% of his base wage.
Boohoo’s largest shareholder Mahmud Kamani, who co-founded the Manchester-headquartered firm in 2006 and is estimated to be worth around £675m, also enjoyed an annual bonus worth 100% of his salary. He took home £1m last year.
In March, shareholders narrowly approved a new bumper incentive deal which could see Mr Lyttle earn a £50m bonus over the next five years provided he led a significant turnaround in Boohoo’s share price.
Boohoo said the share price targets were “realistic” but “very stretching”, and “provide a real incentive for management to return Boohoo to growth and value creation”.
It comes as the retailers share price has collapsed in recent years, plunging by more than 45% in the past year.
Furthermore, Boohoo sunk to a loss of almost £91m from a profit of £7.8m the prior year, after sales slipped by more than a 10th.
The retailer was affected by rising costs, including shipping, staffing and energy, as well as shoppers returning to the high street.
However, Boohoo said it “considered at great length” the group’s financial performance and “determined that they were not reflective of the overall performance of the management team during the financial year”.
It added: “The committee recognises the strong performance of management and successful execution of the cost reduction programme at a pivotal time for the business, which provides a platform for future growth.”
The group had been looking to cut costs through focusing on efficiencies, including automating its warehouses and sourcing goods from Europe rather than Asia.
Boohoo slashed its supplier network by more than 400 firms after investigating the alleged failures across its supply chain, and severed ties with 64 factories.
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