Boohoo to link executive bonuses with supply chain improvements

Boohoo has said it will link multimillion-pound bonuses for its directors with improvements in its supply chain following allegations of poor working conditions and corporate governance.

The online retailer faced criticism from investors last year over its long-term incentive scheme, which could see founders and directors paid up to £150 million.

Boohoo has said it will now link long-term bonuses to the implementation of its Agenda For Change programme after pressure from Parliament’s Environmental Audit Committee.

The group’s annual report also revealed that total executive pay had slipped as Boohoo’s chief secured a lower pay packet for the past financial year.

It said that the total pay packet for executive directors fell by 17.6% to £5.41 million for the year to February, compared with £6.57 million in the previous financial year.

The slump was primarily caused by a significantly lower pay deal for the group’s chief executive officer John Lyttle.

Mr Lyttle saw his total pay deal, which included a base salary of £615,000, fall to £1.57 million from £2.7 million in the previous year after failing to meet targets to secure long-term incentives.

Meanwhile, other directors on the company board, including founders Mahmud Kamani and Carol Kane, received marginally higher pay packets.

Executive chairman Mr Kamani, who owns a 12.5% stake in the business, saw his pay packet increase by 1.2% to £1.39 million for the year, including a £900,000 annual bonus.

Executive director Ms Kane also saw her pay deal nudge slightly higher, rising to £1.38 million for the year.

In the report, Mr Lyttle also highlighted the progress he said the company had made improving corporate governance following the supply chain accusations.

It was alleged last year that some factories in the UK working for the firm were paying staff as little as £3.50 an hour and had working conditions which did not meet lockdown restrictions.

He said the business was “on track” to deliver on the 17 recommendations made by QC Alison Levitt, following her report into the scandal.

In March, the business slashed ties with around 400 supplier firms as part of these changes.

Earlier this month, Boohoo reported that revenues jumped 41% to £1.74 billion in the year to February 28.

Pre-tax profits lifted by 35% to £124.7 million as the group was boosted by higher sales and the “successful integration” of brands bought out of administration, including Oasis and Warehouse.