Boohoo has agreed to link its bonus scheme for directors to making changes to its supply chain following last year’s scandal.

The fast fashion etailer has bowed to pressure from the Environmental Audit Committee (EAC) and MPs to connect its £150m long-term bonus pot to supply chain improvements.

Boohoo said its board would now connect 15% of its bonus scheme to implementing its Agenda for Change, which was put into action following allegations of modern slavery in its Leicester factories last July.

The remuneration committee has also been given the power to scrap top team bonuses entirely if changes are not made.

The bonus scheme, which involves 15 managers, means that Boohoo co-founders Carol Kane and Mahmud Kamani, as well as chief executive John Lyttle, could each receive a £50m payout if Boohoo’s market valuation exceeds certain thresholds.

Boohoo’s decision comes after the EAC wrote to the group urging action to link bonuses to its ethical and environmental pledges.

EAC chair MP Philip Dunne said: “It is incredibly welcome news that senior Boohoo executives have accepted our Committee’s recommendation to link bonuses with improvements to their supply chain.

“While it appears that only 15% of the bonus will be tied to ESG improvements, it is encouraging that Boohoo’s Remuneration Committee will have the discretion to scrap the entire bonus if these much-needed changes are not implemented. I hope these powers are used to keep Boohoo’s management on track.

“Bonuses shouldn’t just be linked to breakneck growth. Today’s action, alongside a commitment to join the Textiles 2030 climate targets, demonstrates Boohoo’s commitment to becoming a responsible corporate citizen. I hope we are reaching a turning point in fast fashion’s awareness of its environmental and social responsibilities and would encourage other firms to follow suit.”

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