Mike Ashley faces shareholder showdown over re-election as Frasers boss
Mike Ashley is facing a shareholders revolt at the Frasers Group annual general meeting tomorrow, following claims that employees were forced to work while furloughed during the coronavirus lockdown.
Shareholder advisory service Pirc has recommended that investors oppose Ashley’s re-election as chief executive of the retail group, which was formerly known as Sports Direct.
The proxy adviser said that reports that employees were pressured to work while laid off under the government’s Coronavirus Jobs Retention Scheme “is representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees”.
“As the CEO is considered responsible for matters such as this, his re-election cannot be supported,” Pirc said in a note to shareholders.
Meanwhile Institutional Shareholder Services (ISS) has recommended that investors abstain on the vote, saying there have been “consecutive significant dissents on his re-election from the minority shareholders”.
It added that efforts have been made to address previously identified failures of governance, stewardship and risk oversight.
Glass Lewis, another proxy adviser, said shareholders should back Ashley’s re-election due to improvements in the composition of the board.
However it said the Frasers boss was “inextricably linked with a series of past and ongoing controversies involving the company.”
“While we remain somewhat concerned by the continued reputational damage which Ashley’s presence on the board elicits, we do not believe that shareholders should vote against his re-election at this time given the aforementioned improvement in board composition, and the as yet unproven nature of the potential breaches of minimum wage laws and furlough scheme rules described above,” Glass Lewis said.
“We will, however, continue to monitor these issues going forward.”
Shareholder groups recommended that investors oppose Ashley’s re-election at last year’s AGM.
However the Sports Direct founder emerged from the meeting relatively unscathed, as 90.99 voted to reappoint Ashley as a director, with 9.01 per cent voting against.
But the retail mogul owned 61 per cent of the company’s shares. Discounting Ashley’s stake in the firm, around 30 per cent of shareholders voted against his re-election.