Boohoo’s new pay plan is a case of “heads I win, tails you lose”. The online retailer unveiled a new long-term incentive plan (LTIP) in its annual report after a 34% share price slump since January put existing schemes out of reach. Chief Executive John Lyttle stands to gain 50 million pounds if the company’s stock market capitalisation soars to 5.6 billion pounds by 2024 and 150 million pounds if the share price reaches 6 pounds. With Boohoo’s market cap down by over two-thirds in the last year to around 1 billion pounds, that looks tricky.
A smartphone with the Boohoo logo displayed is seen on a keyboard in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustrationnew pay plan is a case of “heads I win, tails you lose”. The online retailer unveiled a new long-term incentive plan in its annual report after a 34% share price slump since January put existing schemes out of reach. Chief Executive John Lyttle stands to gain 50 million pounds if the company’s stock market capitalisation soars to 5.
To make sure Lyttle isn’t short-changed, Boohoo has introduced an extra LTIP for this year. The CEO can still be awarded 200% of his 652,000 pound salary as long as he reaches various targets for revenue and earnings growth, as well as somewhat fuzzy environmental, social and governance goals. He can still pocket the other LTIPs if the share price bounces back.
Boohoo may struggle to get it over the line. Other companies with market value-based schemes, like RyanairRegister now for FREE unlimited access to Reuters.com
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