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The boss of Boohoo and Debenhams could collect almost £150m in shares if he significantly boosts the value of the struggling fashion group, which is battling to turnaround sliding sales.

Debenhams Group said on Thursday that Dan Finley, the chief executive, is in line to receive £148.1m in stock in three years’ time, as part of an incentive scheme for top bosses worth more than £200m.

The scheme emerged as Debenhams Group said sales slumped 23% to £297m in the six months to 31 August, dragged down by a 41% dive in sales at its “youth brands”, which include Boohoo and Pretty Little Thing. Sales at its Karen Millen brand fell by 31%.

Sales in the Debenhams division of the group – which is now run as an online marketplace and also includes brands such as Oasis and Warehouse – increased sales by 20%.

The company said it had narrowed pre-tax losses to £2.5m from £130m in the prior year after it cut costs by £160m. It expects to slash another £60m in costs after exiting a warehouse in Daventry and in the US and putting another one in Burnley up for sale.

The group has been battling to revive sales after a boom during the Covid pandemic, when high street shops were closed, was followed by a slump in recent years amid new competition from retailers such as Shein and Temu. It has put its Pretty Little Thing brand up for sale.

The group – which was rebranded from Boohoo to Debenhams this year – said it was ditching an existing management reward scheme after a string of wrangles between Boohoo’s founders and shareholders over bonus payouts.

Under the new scheme, the share price must reach £3 on average over a 30-day period in three years’ time, which would value the company at £4.2bn, 25 times its value when the market opened on Thursday.

To achieve the full payout of £222.2m, shared among several executives, the share price must remain at that level for a further two years.

Alongside the £148m for Finley – who became the group chief executive in 2024, the company’s finance director, Phil Ellis, is in line for up to £14.8m. The rest would be shared with an undeclared group of other management. The executives could still share £21m if the share price hits a minimum of 60p.

The fashion group’s billionaire founder Mahmud Kamani will not participate in the scheme.

The latest reward scheme comes after a string of controversies at Boohoo over payouts to executives.

Last year the group backtracked on a plan to pay three top executives £1m each in bonuses despite reporting widening losses and falling into debt.

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In 2023, shareholders narrowly approved a “growth share plan” under which the then chief executive, John Lyttle, could receive a maximum of £50m in Boohoo shares, part of a total £175m payout to executives, if the company’s share price reached 395p.

The group said it would not seek shareholder approval of the new management reward plan because of concerns that Frasers Group, the group controlled by the Sports Direct founder, Mike Ashley, would intervene. Frasers is its largest shareholder, with almost 30% of the shares.

Debenhams said “a major competitor who is a significant shareholder of Debenhams continues to seek to disrupt the Debenhams Group’s growth strategy and operations rather than maximise its future success”, pointing to Frasers’ previous vote against an attempt to officially change the group’s name from Boohoo Group to Debenhams.

Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: “Boohoo is the right term to describe how its investors must be feeling now, with its shares down about 96% over the last five years.

“Despite this, and in typical poor corporate governance fashion for Boohoo, it has sidestepped its investors by announcing a new compensation scheme for the management team, without seeking shareholder approval. As a result, the pressure really is on management to deliver on its turnaround scheme.”

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