Boohoo Group’s executive team has decided not to accept a £1m bonus each after discussions with shareholders, amidst financial difficulties.
- The bonuses, initially intended for CEO John Lyttle and co-founders Mahmud Kamani and Carol Kane, have been retracted due to investor concerns.
- Boohoo’s financial results for the year ending 29 February 2024 showed a significant increase in pre-tax losses, rising to £159.9m from £90.7m in the previous year.
- Revenue for the period fell by 17% to £1.46bn, accompanied by a 16% decrease in gross profit and a 7% drop in adjusted EBITDA.
- The company emphasised the importance of shareholder engagement for future decision-making, while acknowledging the contributions of its management team.
In a recent development, Boohoo Group’s executives have opted to forgo bonuses amounting to £1m each, following conversations with concerned shareholders. The leadership, comprising CEO John Lyttle and co-founders Mahmud Kamani and Carol Kane, decided against accepting these payouts amidst the company’s ongoing financial challenges.
The intention to award the bonuses was met with resistance from shareholders, especially in light of the company’s increased pre-tax losses, reported at £159.9m for the financial year ending 29 February 2024. This marks a considerable rise from the previous year’s losses of £90.7m. In response to the feedback, the executive decision not to proceed with the bonuses was announced just before the upcoming annual general meeting.
Boohoo’s financial performance over the year reflects a challenging retail environment, with revenue declining by 17% to £1.46bn. Similarly, gross profit fell by 16% to £756m, while adjusted EBITDA saw a downturn of 7%, coming in at £58.6m. These figures underscore the pressures faced by the company, prompting a reassessment of compensation strategies.
In its communications, Boohoo highlighted that while the formulaic outcome of its bonus framework did not recommend payouts, the decision to not proceed demonstrates a commitment to future-proofing the business. The company hinted at potential re-engagement with shareholders to discuss compensation frameworks that align with long-term strategic goals, especially as the next financial year is deemed critical for recovery and growth.
Despite the decision to waive bonuses, Boohoo acknowledged the notable efforts by its management team during the year to position the business for future success. However, it remains clear that investor satisfaction and business sustainability are at the forefront of ongoing and future policy decisions.
Boohoo’s withdrawal of executive bonuses amidst financial losses underscores its engagement with shareholder concerns and strategic priorities for the future.
