// Boohoo has been criticised by hedge fund Shadowfall for the timing of its new bonus scheme
// The bonus scheme could see Boohoo bosses receive a £150 million payout
Boohoo has reportedly been criticised by investors for the operation and timing of its new bonus scheme, which could mean its executives may receive a £150 million payout.
The online fashion retailer’s new bonus scheme, which will pay out up to £150 million to its founders and top executives if its share price rises 66 per cent over the next three years, was criticised by hedge fund Shadowfall, The Times reported.
The scheme had previously been criticised by investment advisory firm Minerva Analytics and Share Action after being announced last Friday.
Last week, Boohoo said chairman and founder Mahmud Kamani and co-founder Carol Kane will each be in line for £50 million if it reaches the £7.55 billion target.
Kamani’s son Samir, who is the chief executive of BoohooMan, will be in line for a £25 million payout.
Meanwhile, finance chief Neil Catto could end up with a £10 million payday.
The remaining £15 million will be split between others in the executive team.
Boohoo is currently listed on the less regulated Aim market, which means the plan is not required to go to a shareholder vote.
As a result, this was implemented shortly after being announced last week.
Boohoo has used its average share price in the month to June 16 as its starting point for the scheme, which represents a market cap of £4.5 billion and is based on its value the day before releasing its trading update which saw sales rise by 45 per cent to £368 million and its share price increase 6.6 per cent.
“We believe the timing of the reference price immediately before this update is particularly odd given management’s likely awareness of the content of that trading update,” Shadowfall managing director Matthew Earl said.
“Especially considering the fact that the shares rose sharply on the back of it,” he said.
Meanwhile, Boohoo said the scheme was only implemented after the company was out of its closed period on June 17.
It added that the 600p target would have remained constant irrespective of the share price being taken from the average of the 30 days to June 16 or 17.