We think shareholders may want to consider a review of boohoo group plc’s (LON:BOO) CEO remuneration.

Key ideas

• boohoo group will hold its General Meeting on June 20
• The salary of UK£676.3k is part of CEO John Lyttle’s total compensation package.
• Total compensation is 52% higher than the industry average
• Boohoo Group’s EPS declined by 113% over the past three years, while the total shareholder loss over the past three years was 90%.

Shareholders probably won’t be too impressed by the company’s disappointing results. boohoo group plc (LON:BOO) recently. Shareholders can take the opportunity to hold the board and management accountable for their unsatisfactory performance at the upcoming annual general meeting on June 20. This would also be an opportunity for shareholders to influence management by voting on company resolutions such as executive compensation, which could have a significant impact on the company. Based on our analysis, we believe CEO compensation may need to be reviewed in light of recent performance.

See our latest analysis for Boohoo Group

How does John Lyttle’s total compensation compare to other companies in the industry?

According to our data, boohoo group plc has a market capitalization of £428m and paid its CEO total annual compensation worth £1.7m over the year to February 2024. It This includes an increase of 27% compared to the previous year. We think total compensation is more important, but our data shows CEO salary is lower, at UK£676k.

For comparison, other companies in the UK specialty retail sector, with market capitalizations between £156m and £625m, had a median CEO total remuneration of 1.1 million pounds sterling. This suggests that John Lyttle is paid more than the industry median. Additionally, John Lyttle also owns shares of Boohoo Group worth UK£64,000 directly under his own name.

Component	2024	2023	Proportion (2024)
Salary	United Kingdom£676k	United Kingdom£651k	39%
Other	United Kingdom£1.0 million	United Kingdom£698k	61%
Total compensation	United Kingdom£1.7 million	United Kingdom£1.3 million	100%

At the industry level, almost 58% of total compensation represents salary, while the remaining 42% is made up of other compensation. It is interesting to note that the Boohoo group allocates a lower share of remuneration to salary than the sector as a whole. Importantly, a trend toward non-salary compensation suggests that total compensation is linked to company performance.

A look at boohoo group plc’s growth figures

Over the past three years, boohoo group plc has reduced its earnings per share by 113% per year. It has seen its revenue drop 17% over the past year.

Few shareholders would be happy to read that EPS has declined. And the impression is even worse when you consider that revenues are falling year after year. So, given this relatively weak performance, shareholders probably wouldn’t want to see high CEO compensation. Moving away from the current form for a moment, it might be important to check out this free visual representation of what analysts expect for the future.

Has Boohoo Group Plc been a good investment?

Few boohoo group plc shareholders would be happy with a -90% return over three years. This suggests that it would not be wise for the company to compensate the CEO too generously.

To conclude…

Along with the company’s poor performance, shareholders have suffered from poor price returns on their investments, suggesting there is little, if any, chance they will support a CEO pay increase. At the upcoming AGM, management will have the opportunity to explain how they plan to get the business back on track and address investor concerns.

While it’s important to pay attention to CEO compensation, investors should also consider other elements of the company. We have identified 1 warning sign for boohoo group which investors need to be aware of in a dynamic trading environment.

Of course, you might find a fantastic investment by looking at another set of stocks. So take a look at this free list of interesting companies.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.