BooHoo LTIP

Wednesday, May 24 2017 by
5

I would be interested to hear people's views on Boohoo's LTIP and directors remuneration in general. I have not fully studied the remuneration report but hope to do so before voting on the accounts.

I also see that the CFO has no "skin in the game". As far as I can see options are granted, received and cashed.

I would also be interested to hear people's views on Co-CEO's who have stock worth £383m and £90m respectively needing excessive pay and bonuses?

Thank you.

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Boohoo Group PLC, formerly boohoo.com plc, is an online fashion retail group. The Company is based in the United Kingdom and has a strong presence in the United Kingdom, the United States, Europe and Australia, selling products to almost every country in the world. The Company owns the boohoo, boohooMAN, PrettyLittleThing and Nasty Gal brands. These brands design, source, market and sell clothing, shoes, accessories and beauty products targeted at 16-30 year old consumers in the United Kingdom and internationally. more »

LSE Price
218.4p
Change
-2.2%
Mkt Cap (£m)
2,598
P/E (fwd)
42.1
Yield (fwd)
n/a



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4 Posts on this Thread show/hide all

Joy Woodstock 24th May '17 1 of 4
2

As I've held Boohoo for nearly a year now, and three-bagged my investment, I am imagining that the question you bring up Purpleski should be of interest to me - but I have to plead ignorance. I'd like to back up your question to see if others think its a question worth considering! I also wonder if you or someone else can show me how to tell how much 'skin in the game' the top directors hold... it is something I've yet to master, though no doubt it's blindingly obvious... thanks for your help!

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Ian4321 24th May '17 2 of 4
1

I was under the impression that the CEO still holds options over 2,027,395 ordinary shares, so I assume he still cares about the share price to some extent, even though he was probably granted the "skin" rather than paid for it. The Remuneration Committee is increasing the annual cash bonus payable to the CFO (the maximum will increase from 75% - of base salary - to 100%) and the joint CEOs (the maximum will increase from 75% to 200%) for 2018. This is in line with the committee's pay philosophy and the "interests of the executives are designed to align with the interests of shareholders through encouraging equity ownership and, in support of this, awards under the group's equity incentive plans are made where appropriate".
My view is that, in general, the remuneration of company executives is effectively out of the control of shareholders and the government is content with the situation staying that way. I wouldn't single out Boohoo in this regard.

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MikeBrenner 24th May '17 3 of 4
1

Whilst i don't like it, I can accept it with companies like BooHoo being driven by a founding team like mahmud and Carol as it has been shown in many other instances that when those folks leave the ship quite often things go off course. My bigger issue is where "professional managers" take massive pay, bonus and stock options just because they are working for a big company ... whose path is quite often set and trending without there meddling!

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purpleski 24th May '17 4 of 4
1

In reply to post #188219

Hi Joy

Yes I first bought November 2015 and have topped along the way but because it is 19.4% of my portfolio and the gain represents 1/3 of my unrealised gain I watch it very carefully.

I am not keen on these LTIP's but understand that directors need incentivising. But feel the co-ceo's should be incentivised enough by the increase in the share price and the commensurate increase in the value of their holdings should be sufficient motivation to grow the business. If they manage, for example, to grow the share price by 10% they are rewarded with an increase in their wealth of £38m and £9m respectively. For me that would be enough.

As for the CFO I can understand that he might need to be incentivised with share options but it would be nice to see him hold on to some and show faith in the company.

As to directors holdings I get these from Morningstar.co.uk but wish they were shown somewhere on Stockopedia but maybe this would be another database they would have to buy.

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