ONLINE fashion retailer Boohoo has stopped its biggest investor, Mike Ashley, from voting on a planned £150 million bonus for its chief executive, as tensions between the online retailer and the Frasers Group owner continue to grow.
The company, now trading under the name Debenhams Group, said it would approve the bonus plan without putting it to a shareholder vote – a move that goes against normal practice for listed firms, reported the Telegraph.
This means Ashley, who owns almost 30 per cent of the business, will not be able to take part in the decision.
In a statement to investors, the company said a “major competitor” who is also a “significant shareholder” had tried to “disrupt Debenhams Group’s growth strategy and operations” by voting against key resolutions at earlier meetings. Although Boohoo did not name him, the comments appear to refer to Ashley.
Relations between the billionaire and the Boohoo leadership have been strained for years. Ashley has repeatedly criticised the board and its founder, Mahmud Kamani.
In August, he tried to remove Kamani and two senior directors, accusing them of acting against the interests of shareholders. Earlier this year, he also attempted to stop the business from changing its name to Debenhams. The pair originally clashed in 2021 when they were battling for control of the now-closed department store chain.
Explaining the decision to bypass a vote, Boohoo said that although it had normally sought shareholder approval for management bonuses, it believed a general meeting would “not be most likely to promote the success of the company”.
Under the new long-term incentives, chief executive Daniel Finley could receive up to £148.1m if Boohoo’s share price jumps from 10.5p to £3 within five years and stays at that level for a further three years.
The wider scheme allows senior executives to share up to £222m if they raise the group’s market value from £145m to £4.2 billion.
Boohoo owns brands including Karen Millen and PrettyLittleThing. The company was once valued at more than £5bn during the pandemic, but has since struggled as low-cost rivals such as Shein have eaten into its market.
The board said the new incentives were essential to ensure senior leaders could “execute the turnaround strategy over the coming years and consequently restore profitability and unlock value for all shareholders”.
The firm reported a 23 per cent fall in sales to £296.9m during the first half of the year compared with the same period last year. However, it also revealed a steep fall in losses, lower costs and reduced debt. Investors reacted positively, with shares rising by up to 40 per cent in morning trading to around 16p.
“Our turnaround is gathering real pace. We are making progress, we are moving fast, and we are transforming the business," Finley was quoted as saying.
