Boohoo unveils new growth plan as it chases £5bn market cap

The new plan would reward executives, including boss John Lyttle and chief financial officer Shaun McCabe, with a pot worth £175m between them if the retailer, which has struggled during tough trading conditions, achieves a market capitalisation of £5bn.

At the time of writing, Boohoo was capitalised at £605.4m.

A previous scheme had been left under water as Boohoo’s market value fell, a decline the retailer attributed to a “unique and unprecedented set of macro-economic and market headwinds experienced over the last three years”.

Boohoo said it created the new plan after the measures in place at present were deemed to “no longer operate as an effective incentive mechanism” for key staff “who are responsible for driving business performance and delivering Boohoo’s strategic objectives”.

The new growth plan is intended to create shareholder value and drive long-term sustainable growth for the company through a series of share price targets.

The awards have been divided into five tranches and are said to be subject to a performance condition where “a distinct 90-day average share price hurdle must be achieved within an overall five-year measurement period from the date of grant”.

Chief executive Lyttle could be awarded £50m, while McCabe could be awarded £25m under the new plan.

Chair of Boohoo’s remuneration committee Iain McDonald said: “The Boohoo group has an outstanding executive team whose ongoing retention is crucial, particularly in an era where the recruitment of such quality is more competitive than ever before. 

“This plan facilitates retention and resolutely aligns our executives’ interests with those of shareholders.

“In designing the plan, we recognised it needed to go deeper into the business than prior schemes while leaving headroom to attract the world-class talent that is essential to the execution of our strategy and growth ambitions. 

“This is why the plan extends beyond the executive to include additional members of the senior leadership, and indeed the wider employee population, while acting as a powerful recruitment and incentivisation tool for new joiners.

“The company has a proud entrepreneurial heritage, having always encouraged and enabled significant levels of employee share ownership. This scheme extends this principle, delivering more accountability and further alignment with our broader shareholder base.”

Boohoo executive chair Mahmud Kamani said: “I wholeheartedly endorse the remuneration committee’s proposed growth plan, designed to rebuild very substantial shareholder value within the next five years.

“While these are extremely ambitious targets in a changed world, in my view as executive chairman and the company’s largest shareholder it’s absolutely the right thing to do to align the interests of the management team and all of our hardworking colleagues with those of all of our shareholders.” 

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