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Boohoo Grapples with Investor Outcry Over Executive Bonuses Despite Fiscal Shortfalls


Boohoo Grapples with Investor Outcry Over Executive Bonuses Despite Fiscal Shortfalls

The fashion retailer Boohoo is facing an insurrection from its stakeholders following plans to disburse significant executive bonuses in the wake of recording financial deficits in its annual report.

Criticism has mounted against the retailer for endorsing bonus payouts totaling £1 million as per its yearly financial disclosure, whilst falling short of reaching its earnings targets.

An assembly of the firm’s shareholders has declared their intent to challenge the proposal for sizeable bonus disbursements to founders Carol Kane and Mahmud Kamani, as well as to CEO John Lyttle, at the forthcoming shareholder meeting in June, as per the details shared by The Sunday Times.

It is understood from City A.M. that the contentious bonus proposition encompasses £300,000 in liquid funds and an additional £700,000 worth of Boohoo shares.

An opposing stakeholder, as cited by The Times, has described the proposed bonus arrangement for executives as “exorbitant” and has voiced concerns over an apparent shortfall in shareholder consultations regarding the newly devised long-term incentives scheme.

The disputed bonus announcement succeeds the recent declarations of Boohoo’s escalated losses, soaring to just shy of £160 million earlier this month, against a backdrop of a stringent economic milieu marked by rising inflation and a fall in the consumers’ spending capacity.

During the fiscal year culminating on February 29, the retailer registered a 17% slump in turnover, amounting to £1.46 billion, attributing the downturn to a deliberate move towards profitability amid a challenging commercial environment. The shift to a commission-based marketplace model has additionally influenced the firm’s turnover.

Image Source: T. Schneider / Shutterstock

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