Boohoo boss takes home £650,000 bonus despite retailer sinking into a loss

John Lyttle, the chief executive of the retailer, took home a £1.35 million pay packet in the year to February.

The boss of fast-fashion firm Boohoo has been handed a more than £650,000 bonus despite plunging into a loss and seeing its share price lose nearly half its value in a year (Ian West/ PA) (PA Archive)

The boss of fast-fashion firm Boohoo has been handed a more than £650,000 bonus despite the company plunging into a loss and seeing its share price lose nearly half its value in a year.

John Lyttle, the chief executive of the retailer, took home a £1.35 million pay packet in the year to February.

It was made up of his £651,000 salary, and an annual bonus also amounting to £651,000, or 100% of his base wage.

Boohoo’s owner, Mahmud Kamani, who co-founded the firm in 2006 and is estimated to be worth around £675 million, also enjoyed an annual bonus worth 100% of his salary.

He took home £1 million last year.

In March, shareholders narrowly approved a new bumper incentive deal which could see Mr Lyttle earn a £50 million bonus over the next five years provided he led a significant turnaround in Boohoo’s share price.

The firm said the share price targets were “realistic” but “very stretching”, and “provide a real incentive for management to return Boohoo to growth and value creation”.

It comes as the firm’s share price has collapsed in recent years, plunging by more than 45% in the past year.

Furthermore, Boohoo sunk to a loss of almost £91 million from a profit of £7.8 million the prior year, after sales slipped by more than a 10th.

The retailer was affected by rising costs, including shipping, staffing and energy, as well as shoppers returning to the high street.

However, Boohoo said it “considered at great length” the group’s financial performance and “determined that they were not reflective of the overall performance of the management team during the financial year.”

It added: “The committee recognises the strong performance of management and successful execution of the cost reduction programme at a pivotal time for the business, which provides a platform for future growth.”

The group had been looking to cut costs through focusing on efficiencies, including automating its warehouses and sourcing goods from Europe rather than Asia.

The firm landed in hot water after an undercover investigation by the Sunday Times in 2020 exposed poor pay and conditions for workers at its biggest factory in Leicester.

It said that staff making clothes for Boohoo’s Nasty Gal brand could allegedly expect to be paid £3.50 an hour amid working conditions which did not meet Covid lockdown restrictions.

Boohoo slashed its supplier network by more than 400 firms after investigating the alleged failures across its supply chain, and severed ties with 64 factories.

It said it had been working with unions and charities to support garment workers in the region and had raised standards across its supply chain.

Boohoo owns a number of fast-fashion brands including Pretty Little Thing, which was founded by Umar and Adam Kamani, the sons of Mahmud Kamani.

The directors’ annual bonus targets are based 30% on revenue, 45% on profits, 15% on sustainability measures and 10% on UK manufacturing and international supply chain milestones.

It means that a quarter of Mr Lyttle’s bonus, or around £163,000, was granted based on his performance in making the group more fair and sustainable.