Lush has been outed as paying £5m in bonuses to its directors, despite the British beauty chain taking £5.1m in government support last year.
According to The Guardian, the bonuses were paid on top of salaries in 2022 to six staff at Lush Cosmetics, the brand’s main operating company, based in Poole, UK.
Payees included husband and wife co-founders Mark and Mo Constantine, who are also shareholders.
The government support received by the company in financial 2022 was largely in the form of business rates relief and the figure was significantly lower versus the £30.1m state support Lush received in financial 2021 during the height of lockdowns.
For financial 2022, not including Lush’s acquisition of its North American joint venture, the company’s EBITDA was £17.3m, £21.6m lower than FY21.
The company is currently embroiled in a dispute with former Director Andrew Gerrie, who left Lush in 2015, over his attempts to sell his shares in Lush, now held via Nailberry-owner Silverwood Brands, an investment firm that Gerrie co-owns.
Had Lush distributed its profits via a dividend rather than a bonus, it would have had to pay a share of them to Gerrie or Silverwood.
As Gerrie is no longer a staff member, he did not receive a share of the 2022 bonus.
Commenting on the Silverwood Brands dispute, Mark Constantine previously told Cosmetics Business: “While he was here, he [Gerrie] shared our values.
“He’s now gone elsewhere, and he no longer shares those values.”
The row is still very much ongoing with Lush Cosmetics and its related company Cosmetic Warriors commencing high court proceedings on 25 July.
The new action hopes to prove that the transfer of the shares to Silverwood Brands did not comply with Lush’s company rules.
Speaking with Cosmetics Business, a Lush spokesperson said: “The bonus referred to was an exceptional item for employees – Directors and other management – who were responsible for the successful acquisition of the Lush North America business.”
They added: “We have enjoyed a bonus culture at Lush since the very beginning.
“Protecting our bonus culture is a core principle of the Lush Employee Benefit Trust, guaranteeing access to bonus schemes for all Lush Group employees and we have continued to honour this for all staff throughout the pandemic.
“The bonus referred to in the media articles is related to just one of the bonus schemes that paid out during FY22 where performance, productivity or sales targets were achieved; the total amount of bonus paid to staff in FY22 was over £14m.”
Lush said that despite a number of unexpected events globally hampering foreasting, it expects to see top line sales increasing for FY23.
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