Cyprus Mail

British company may link executive bonuses to improved worker rights

boohoo cyprus mail

British online fashion retailer Boohoo is considering linking bosses’ multi-million pound bonuses to Environmental Social and Governance (ESG) improvements, including workers’ rights, it said on Saturday.

The British parliament’s Environmental Audit Committee (EAC) recommended the move following an evidence session in December, attended virtually by Boohoo co-founder and chairman Mahmud Kamani and other executives.

At that session, Kamani told lawmakers he would fix the group’s supply chain failings.

In September, Boohoo accepted all the recommendations of an independent review which found major failings in its supply chain in England after newspaper allegations about working conditions and low pay and set out steps to tackle the problems.

Boohoo, which sells clothing, shoes, accessories and beauty products targeted at 16- to 40-year-olds, also faced investor criticism last year for the operation and timing of its new bonus scheme. The scheme would pay out up to 150 million pounds ($209 million) to its founders and top executives if Boohoo’s share price rose 66 per cent over three years from June 2020.

Kamani and co-founder Carol Kane could each be in line for 50 million pounds, Kamani’s son Samir, who is CEO of BoohooMan, could be in line for 25 million pounds, while finance chief Neil Catto could end up with 10 million pounds.

“As we stated in our response to (EAC chairman, Conservative Party lawmaker Philip) Dunne, the board are discussing this matter and have shared the group’s proposed approach with a number of our shareholders, who have given constructive feedback on our plans to date,” said a Boohoo spokesperson.

“Further details of the approach will be included in the group’s annual report which will be published in May.”

Dunne welcomed the development.

“News last summer emanating from Leicester’s garment industry appalled us all, with allegations of modern slavery in supply chains and a lack of covid secure measures in factories,” he said.

“Bonuses shouldn’t just be linked to breakneck growth. Boohoo needs to demonstrate that it is delivering verifiable improvements in workers’ rights and the climate impact of its products.”

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