Boohoo has bowed to shareholder pressure and will link the pay of its executives to environmental, social and governance targets following an investigation that found evidence of labour abuse across its UK supply chain.
In the company’s annual report published this week, it said: “We have redesigned the executive directors’ remuneration policy to align the interests of the executives with stakeholders, including the introduction of performance conditions linked to ESG criteria.
“This is an important part of the board’s response to the findings of the independent review and the successful implementation of the corporate governance aspects of our Agenda for Change programme.”
It comes after Boohoo last year announced a controversial 150 million pound management incentive plan amid its rapid growth.
Under the proposed plan, top executives will share a maximum of 150 million pounds if the market capitalisation rises by 66 percent to 7.55 billion pounds over the 3 year-performance scheme period.
Participants in the scheme include co-founders Mahmud Kamani and Carol Kane who will get a third of the payout each, and CFO Neil Catto who will get 6.67 percent.
Boohoo announced the linking of its executive pay to ESG targets this week following mounting pressure from shareholders and MPs following an independent review last year that found “many failings” across its UK supply chain.
When publishing the results of the review, Boohoo announced its Agenda for Change programme in which it set out six steps to enhance its supplier audit and compliance procedures. As part of that, it said it would publish a full list of its UK suppliers.
The list, published in March, revealed Boohoo had cut ties with hundreds of suppliers.