Shareholders of Boohoo have voiced their opposition to its potential £175 million bonus plan for a group of executives in a 37.39% vote against a motion to approve the scheme.
The plan would see bonuses paid out over a period of time if Boohoo’s stock market capitalisation reaches £5 biilion.
Boohoo’s current stock market capitalisation is about £690 million.
At a general meeting on Wednesday, a vote to approve the new plan was passed by 62.61% to 37.39%.
Boohoo said in a stock exchange statement: “The Remuneration Committee will reflect on feedback gathered throughout the consultation process regarding the Growth Plan, and will continue to engage with shareholders with regard to the group’s remuneration policy to ensure that shareholder views are considered.”
Iain McDonald, chairman of the Boohoo Remuneration Committee, said: “The Growth Plan was designed with an intention to rebuild substantial shareholder value through the delivery of extremely ambitious targets, and it acts as a powerful retention, recruitment and incentivisation tool for all participants, resolutely aligning their interests with those of our shareholders.
“We followed a detailed consultation exercise with a number of our larger shareholders and we thank all of them very much for their engagement and contributions.”
Boohoo executive chairman Mahmud Kamani said: “As Boohoo’s largest shareholder I wholeheartedly endorsed the Growth Plan, recognising the importance of aligning the interests of all shareholders with those of our hardworking boohoo colleagues.
“The value generated for shareholders would be some 25 times greater than the maximum award of the Plan, and I am therefore pleased that it is being implemented.”
Announcing the plan on February 16, Boohoo said: “To achieve full vesting across all five price hurdles, the company’s market capitalisation will be required to reach a minimum of £5.0 billion, creating implied shareholder value of around £4.4 billion over the term of the Growth Plan.
“At a £5.0 billion market capitalisation, the company’s share price will be approximately £3.95, a 747% increase on the last closing share price of 46.65p or representing a minimum 53% CAGR over the term of the proposed plan.
“The number of awards issued during the measurement period and the associated boohoo share price hurdles are set such that the maximum value of awards under the Growth Plan will, as at the date of the performance conditions being achieved, be £175.0 million.”