The boss of fashion brand Boohoo could bag a bonus worth 200% of his £652,000 salary if he hit a series of targets in the next year. John Lyttle will be part of a new long-term incentive plan (LTIP) announced by the business.
The Mancester-based group, which also owns Karen Millen, Nasty Gal, PrettyLittleThing, Coast, Misspap, Oasis, Warehouse, Burton, Wallis, Dorothy Perkins and Debenhams, has published its annual report, BusinessLive reports.
The new LTIP comes on top of Boohoo's existing plan to hand the CEO a £150m boost if its share price reaches £6. However, the group's share price is currently hovering at around 80p after falling from £3.19 last May.
Boohoo's share price has never been higher than the £4.12 it achieved in June 2020. Mr Lyttle would also gain £50m if the company's stock market capitalisation increased to £5.6bn by 2024.
According to the new LTIP for the year to February 28, 2023, basic salaries for chairman Mahmud Kamani, executive director Carol Kane, Mr Lyttle and CFO Neil Catto will increase by 3% with effect from this month.
Boohoo added that this increase is in line with the average rose for its workforce as a whole. The maximum bonus will continue to be up to 100% of Mr Catto's salary of £318,270 and up to 200% for Mr Kamani and Mrs Kane, who earn £477,405 each.
Boohoo's annual report said: "We have also decided that the bonus opportunity for John Lyttle will increase to 200% of salary, to ensure he has a market-competitive overall remuneration package and to align his incentive opportunity with that of the founder directors.
"A bonus limit at this level is also considered to reflect more accurately his responsibilities and contribution as group CEO."
It added: "We were pleased that the remuneration policy received a significantly improved level of shareholder support at our AGM in 2021. During the year, the Remuneration Committee undertook a further review of the policy and consulted extensively with major shareholders on proposed changes.
"We recognised that there are significant commercial benefits derived from a reward package for the executive team determined in part by performance-related ESG criteria, and introduced specific and measurable ESG-related targets into the executive bonus and LTIP schemes. The revised policy, which is tailored to boohoo’s specific challenges, ...and will be put to an advisory vote at our AGM in June 2022."
Boohoo also said: "We have decided that all of the executive directors should receive an award under the LTIP in the 2023 financial year. This is to ensure ongoing incentivisation over the longer term and beyond the timeframe of the long-term incentive plans put in place in 2019 and 2020.
"The LTIP offers a conventional long-term incentive with a three-year performance period which we feel will work well for the next stage of the evolution of the business, and our expectation going forward is that we will offer a new LTIP grant to the directors each year."
