Skip to main content

Boohoo co-founder Carol Kane faces shareholder revolt

// Advisory group says a Boohoo board incentive scheme could lead to “excessive payouts”
// Glass Lewis is advising shareholders to block the re-appointment of co-founder Carol Kane
// It cited her “direct role” in the inadequate governance practices” regarding the Leicester factory scandal last year

Boohoo co-founder Carol Kane is facing a shareholder revolt regarding her reappointment to the board in the wake of her role in last year’s Leicester factory scandal.

Influential shareholder advisory group Glass Lewis urged City investors to block the reappointment of Kane to Boohoo’s board, citing concerns about high pay and her “direct role” in the “inadequate governance practices” regarding the Leicester factories that make the online retailer’s clothes.

Last year Boohoo was embroiled in modern slavery allegations after an investigation found workers at one of its Leicester suppliers reportedly undertaking excessive hours in high-risk conditions amid the Covid-19 pandemic, and often on illegal low pay.

READ MORE:

No senior Boohoo director has lost their job over the scandal, although the online retail giant has since launched an investigation, led by Alison Levitt QC, into its supply chain and pledged to address issues around sustainability and working conditions.

Earlier this month, Boohoo increased the base salary of Kane and her co-founder – and current chairman – Mahmud Kamani by 3.5 per cent to £450,000 in the financial year to February 28.

Both are also each eligible for a £50 million bonus if Boohoo’s market capitalisation hits £7.5 billion by June 2023. It is currently at £4 billion.

An additional £50 million worth of bonuses would be paid out between 15 key directors if Boohoo’s market valuation hits its target.

However, Glass Lewis advised shareholders to vote against Boohoo’s remuneration report.

It said the new management incentive scheme could lead to “excessive payouts” based predominantly on the performance of Boohoo’s shares.

Boohoo said this month that the board would have the power to reduce the payout if the group’s Agenda for Change programme was not fully implemented.

The programme includes establishing a whistleblowing system, responsible sourcing plan, and publishing the names of all factories used by Boohoo worldwide.

Boohoo had also confirmed earlier this month that it would link senior executive director bonuses to its environmental, social and governance (ESG) improvements.

The Environmental Audit Committee (EAC) had made the recommendation to link those bonuses to its ESG improvements in a letter to Boohoo following an evidence session – which was prompted shortly after the supply chain scandal – in December.

In its report last week, Glass Lewis said: “We have reservations regarding these plans, whereby the executives may be eligible for extremely large payouts based predominantly on share price performance, which may primarily reflect market forces rather than company or management performance.

“We acknowledge that the company has introduced an underpin to the awards under these schemes, whereby vesting is subject to the committee being satisfied that the Agenda for Change programme has been successfully implemented over the performance period.

“We believe this is a positive direction of travel in terms of aligning the awards with shareholders’ interests; however, remain concerned with the underlying nature of the plan.”

Another influential shareholder, Pirc, remained sceptical about Boohoo’s board reining in pay.

It cited the full annual bonuses paid this year to top directors despite Levitt’s report finding they were aware of “very serious issues” about the treatment of Leicester factory workers which they “did not move quickly enough” to address.

Pirc head of stewardship Tom Powdrill added that the approval of the full bonus did “not give us confidence on how they would implement [the limits on future bonuses] in practice”.

A Boohoo spokesperson said: “During recent months the remuneration committee engaged extensively with institutional shareholders in drawing up the overall remuneration policy which includes [environmental and social] metrics as part of the annual remuneration for directors.

“The interaction was very constructive and has resulted in the company’s Agenda for Change being a key factor in determining senior executive remuneration.”

Click here to sign up to Retail Gazette‘s free daily email newsletter

The post Boohoo co-founder Carol Kane faces shareholder revolt appeared first on Retail Gazette.



from Retail Gazette https://ift.tt/3i3CEJF
via IFTTT
Labels:

Comments

Post a Comment

Popular posts from this blog

Eagle Labs launches impirica CBD brand

ST. PETERSBURG, Fla. — Eagle Labs has launched impirica, a new brand of CBD intended to eliminate consumer fear, and increase confidence, in trying the exciting new cannabidiol category. Michael Law Although most Americans have now heard about CBD, many are very confused and concerned about product quality. This is inhibiting trial in the category and holding back conversion into sales. In fact, a 2017 study by Johns Hopkins University found that two out of three CBD products on the shelf did not contain the amount of CBD reflected on the label. Furthermore, in 2018 and 2019, the FDA sent notices to a substantial number of CBD manufacturers advising them of serious concerns about product quality or egregious medical claims. The impirica brand looks different than most CBD brands — the brand name itself connotes testing and trust, says Eagle Labs chief commercial officer Michael Law. “It doesn’t use the traditional category colors of browns and greens, and you won’t find a hemp...
68 comments
Read more

Coronavirus Recovery: Canadian Small Businesses Must Focus on Easing Employee, Customer Fears

By M. Tina Dacin and Laura Rees A small business has been  given the green light to reopen amid the COVID-19 pandemic . What does it need to consider for employees and customers? Small business owners are reorganizing physical space to account for continued distancing requirements and rethinking supply chains to deliver products and services in new ways to meet changing demand patterns. But they must not forget the hearts and minds of employees and customers. That doesn’t mean replacing a focus on the bottom line, but it helps address the need for a new set of expectations and ways of communicating in terms of product or service offerings, delivery methods and real-time feedback. Based on our expertise in organizational behaviour and past research we’ve conducted, we provide a set of recommendations to help small businesses thrive in our new COVID-19 economy by looking after the hearts and minds of the people most important to businesses — employees and customers. Fear, Anxi...
1 comment
Read more

World's 1st Pizza Subscription Service Launches in Toronto

general assembly subscription user opening delivery box of pizza. photo: general assembly pizza By Mario Toneguzzi Toronto-based General Assembly Pizza has launched what it describes as the world’s first pizza subscription service as it also plans to aggressively expand its product offering in the near future by opening a new concept in the market. "Since opening our doors in 2017, we have pushed for the best guest-experience possible — that's why our dough is 100 percent naturally leavened, that's why we have a purpose-built 400-square-foot pick-up and delivery area, and that's why we’ve launched a direct-to-consumer subscription-based ecommerce platform,” said Founder & CEO Ali Khan Lalani. “In 2020, providing the best guest experience means General Assembly Pizza has to be more than a restaurant. I'm proud to say that after almost six months of planning, many roadblocks, and countless pivots — all while maintaining our day-to-day restaurant operatio...
1 comment
Read more