- Friday, April 26, 2024
By: Pramod Thomas
ONLINE fast-fashion retailer Boohoo has said that it will link its £150 million bonus scheme to improving its supply chain as demanded by MPs.
The company said that its board would now link 15 per cent of its bonus to improvements while the remuneration committee would have the discretion to scrap the entire award if changes were not implemented, reported The Times.
The retailer, which recently bought fallen high street names Debenhams and Dorothy Perkins, was subject to a critical review by Alison Levitt QC.
Boohoo was engulfed in scandal last July after an investigation revealed that workers packing clothes for Boohoo at Leicester factories were being paid below the minimum wage and operating in unsafe conditions.
The retailer has committed to an “agenda for change” programme to improve its supply chain following the review and it published its full list of UK clothing suppliers in March after severing ties with 64 factories, reports said.
The Environmental Audit Committee recently called on the company to link bonuses to improvements to its supply chain.
“I hope these powers are used to keep Boohoo’s management on track. Bonuses shouldn’t just be linked to breakneck growth,” said Philip Dunne, chairman of the committee.
The controversial bonus scheme, which includes 15 managers, means that co-founders Mahmud Kamani and Carol Kane will still receive £50m each if Boohoo’s market valuation reaches over £7.5 billion by June 2023.
John Lyttle, chief executive, will also receive a £50m bonus if the market value reaches £6bn by 2024.
According to reports, Boohoo’s shares will have to rise by 85 per cent over the next two years to hit the founders’ targets.
