Boohoo hit by shareholder revolt over exec bonuses

Boohoo has suffered a shareholder revolt at its AGM following criticism over millions of pounds in bonuses paid to its bosses.

Although all resolutions passed, more than 40% of voting shareholders voted against Boohoo’s remuneration plan at the meeting on Friday (19 September) after advisory firms called on shareholders to reject the policy.

According to The Telegraph, both the Institutional Shareholder Services (ISS) and Glass Lewis, a proxy advisory services company, raised concerns over the group’s executive bonuses. 

ISS reportedly said that Boohoo failed to explain why CEO Dan Finley received a £2m bonus only months after joining the business, while Glass Lewis criticised Boohoo for paying out the bonuses despite the group’s ongoing weak performance.

In an update regarding the AGM results, Boohoo said: “The remuneration committee sets the remuneration policy to attract and retain the leadership team, and to align against delivery of the group’s strategy.”

It claimed that the vast majority of shareholders had supported the proposal, aside from majority shareholder Frasers Group, which holds a 29.70% stake in the company.

Other AGM measures faced similar backlash, including the re-election of Tim Morris, Mahmud Kamani, John Goold as director, and re-appointment of CEO Dan Finley and CFO Phil Ellis.

Boohoo said this was again driven by Frasers, adding it was “pleased that over 98% of shareholders, excluding a major competitor, supported the resolutions to re-appoint and re-elect the directors”.

The move continues what has been an ongoing public feud between the two groups over Boohoo’s governance. 

Last November, Frasers openly called for Boohoo shareholders to oust Mahmud Kamani from the company and instead appoint Mike Ashley to the board, citing that “urgent change is needed” at Boohoo following its latest “dismal” results.

In an open letter to shareholders, the Mike Ashley-owned group said Boohoo’s board of directors have been asked to remove Kamani, saying “recent events, in particular the results, lack of transparency and further supply chain allegations, should leave shareholders in no doubt – Mr. Kamani must go”.

Boohoo had raised “concerns” over Frasers’ behaviour in a previous open letter to Frasers, again accusing the group of “commercial self-interest”. 

This followed Frasers seeking stronger involvement in Boohoo’s strategic review, with Boohoo calling the move “inappropriate” due to the fact Frasers is a trade competitor and not an independent shareholder in the online retailer. 

Frasers had previously called on Boohoo to appoint Ashley as director and CEO of the struggling online company, after slamming the “continued incompetence” of the current Boohoo board amid an “abysmal” trading performance. 

Boohoo, Frasers and ISS have been contacted for comment.