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Boohoo links £150M bonus scheme for improvements in factory conditions

Boohoo links £150M bonus scheme for improvements in factory conditions
Boohoo links £150M bonus scheme for improvements in factory conditions

Fashion retailer Boohoo has reportedly linked a £150 million bonus scheme for its top managers for the improvement of working conditions in its factories. The move comes after pressure from shareholders, add sources privy to the matter.

According to Boohoo, the board would have the power for reducing the pay out to 15 key managers provided the “Agenda for Change” programme of the group was not entirely implemented. These managers also comprise co-founders Mahmud Kamani and Carol Kane.

The changes comprise a responsible sourcing plan, the establishment of a whistleblowing system, and publishing the names of all factories that are deployed by Boohoo at the global level.

As per a statement by Boohoo’s remuneration committee on Wednesday, 19th May 2021, the comments from stakeholders had been instrumental in informing the changes that have been made and it would continue in keeping remuneration under review.

For the record, Boohoo had promised to enhance conditions in the supply chain that feeds its online retail empire the previous year. The move followed revelations regarding poor pay as well as conditions especially in Leicester where almost 40% of the group’s fashions are sourced.

The committee also appeared to admit that it had been wrong to have implemented the extravagant bonus scheme the previous year without getting approval from shareholders. The move broke the UK’s code of corporate governance.

While there was no need for seeking approval, the committee recognizes that it would have been more consistent with its philosophy of shareholder openness and transparency for seeking the approval of the shareholder prior to the implementation of the plan.

As per the controversial scheme that was introduced the previous year, Kane and Kamani are both due to receive a sum of £50m, which is a third each of the overall bonus. However, this is applicable if the present market valuation of Boohoo, which is £4 billion, reaches just more than £7.5 billion through June 2023.

Source credit: https://www.theguardian.com/business/2021/may/19/boohoo-links-150m-bonus-scheme-to-changes-in-factory-conditions

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for newsorigins.com, spanning the verticals of business, finance, and technology.