Key facts
- Frasers Group faces a shareholder revolt over a proposed £100 million bonus for incoming CEO Michael Murray.
- Advisory groups Pirc and Glass Lewis are advising shareholders to vote against the remuneration plan.
- Murray is set to receive over £100 million if Frasers' share price hits £15 for 30 consecutive days within four years.
- Finance director Chris Wootton could receive up to £9 million under the new share bonus scheme.
- The payments come after Frasers claimed £80 million in furlough assistance and £97.5 million in business rates relief.
Mike Ashley’s Frasers Group is facing a potential shareholder revolt over a proposed £100 million bonus scheme for its incoming chief executive, Michael Murray, and a cash bonus for its finance director. The company is seeking shareholder approval for these remuneration plans at its annual meeting, despite having accepted millions of pounds in government support during the pandemic.
Influential advisory groups Pirc and Glass Lewis have advised shareholders to vote against the plan, flagging "excessive payouts." Proxy voting service Minerva Analytics also noted that shareholders may consider the ultimate payout "unreasonably high," even with stretching targets.
Murray, who is engaged to Ashley’s daughter, is slated to receive just over £100 million if Frasers’ share price reaches £15 for 30 consecutive trading days within four years from October 7, 2021. This bonus would be in addition to his £1 million annual base salary. Frasers announced in August that Murray, who joined the company in 2016, would take over as chief executive from Ashley next year.
Finance director Chris Wootton could receive up to £9 million under the new share bonus scheme, which would begin to pay out if the share price hits £12 for a 30-day period. Wootton had previously received a £100,000 cash bonus on top of his £150,000 salary for his efforts during the pandemic. His salary was later increased to £250,000 in May, with the potential for an annual bonus of up to £500,000 and the aforementioned £9 million under the long-term share bonus scheme.
Frasers stated that the targets for the new share bonus scheme are both "stretching and achievable." However, these proposed payments follow Frasers claiming approximately £80 million in furlough assistance and £97.5 million in business rates relief globally last year.
Glass Lewis expressed concern about the committee's decision to grant a discretionary bonus to the CFO, especially in light of the stakeholder experience during the Covid-19 pandemic. The firm also voiced "serious reservations" about the new share bonus scheme, suggesting it might reward "short spikes in performance, as opposed to sustainable long-term growth." Pirc advised investors to oppose the scheme, arguing that incentives tied solely to share price could reward failure, with executives potentially benefiting disproportionately from favorable macroeconomic influences with minimal effort. Pirc also recommended voting against the reappointment of chairman David Daly and senior independent director Richard Bottomley, criticizing the lack of an externally run whistleblowing hotline.