Debenhams has ignited controversy by launching a new executive bonus scheme that could see its chief executive, Dan Finley, receive a staggering maximum payout of £148.1 million. The ambitious plan is designed to incentivise leaders to execute a dramatic recovery of the struggling retail group, formerly known as Boohoo Group.
The High-Stakes Turnaround Incentive
The newly introduced group turnaround scheme targets senior executives, offering monumental rewards for a monumental recovery. For Dan Finley to secure the full £148.1 million bonus, Debenhams' share price must skyrocket from its current level of 11.5 pence to £3 over a five-year period.
This extraordinary leap would increase the company's market valuation from approximately £145 million to £4.2 billion, representing a near 26-fold increase. The scheme was approved without a direct shareholder vote, a move that has raised eyebrows in the City.
Progress Amidst Conflict and Falling Revenue
The announcement comes as Debenhams claims its turnaround is “gathering real pace”. The company reported significantly reduced losses after slashing around £160 million in costs and returning all its brands to profitability. However, this positive news is tempered by another reported fall in overall revenues.
The bonus plan has also emerged against a backdrop of a major dispute with significant shareholder Mike Ashley. Debenhams' board explicitly criticised the actions of “a major competitor who is a significant shareholder”, accusing them of seeking to disrupt the group's growth strategy.
A Long Road Back from Pandemic Highs
The potential reward underscores the depth of the challenge facing the retailer. At the height of the e-commerce boom in 2020, Debenhams was valued at over £5 billion. Its value has since collapsed due to waning consumer demand and intense cost pressures, making the £3 per share target a formidable goal.
CEO Dan Finley remained bullish, stating: “We are making progress, we are moving fast, and we are transforming the business. These results show that our strategy is working.” Whether this high-value incentive will be the catalyst for a full recovery remains one of the retail sector's most watched stories.
