Mike Ashley’s Frasers Group urges investors to back employee bonus scheme
Mike Ashley’s Frasers Group has urged shareholders to back an employee bonus scheme, which would require the retailer’s share price to triple before workers receive a payout.
Ahead of this morning’s annual general meeting, the firm, which has come under fire recently over reports that staff were asked to work while on furlough, called on investors to back the scheme, which it said could be worth more than £100m.
The proposals would offer cash bonuses of up to four weeks salary for “eligible and qualifying workers as a reward for their loyalty and hard work”.
Alternatively, 1,000 employees that demonstrate “outstanding performance” could receive share awards.
Up to 10 of those workers would be given share awards worth around £1m, while the rest would receive shares worth between £50k and £500k.
However, in order for the scheme to pay out Frasers Group’s share price would need to hit 1,000p, about three times its current value, and remain at that level for 30 consecutive trading days.
David Daly, the firm’s non-executive chairman, said: “This scheme strikes the right balance between rewarding as many of our people as possible, whilst also potentially paying life changing sums to those who make the most outstanding contributions.
“These are challenging times but we believe that a £10 share price is a realistic target as our elevation strategy continues to go from strength to strength”.
Meanwhile, the firm’s billionaire boss Ashley faces a shareholder revolt over his re-election as Frasers’ chief executive at today’s meeting.
Shareholder advisory service Pirc recommended that investors oppose his re-appointment following reports in The Guardian that Sports Direct and House of Fraser managers were asked to work while temporarily laid off during the coronavirus lockdown.
In a note to shareholders the proxy adviser said the allegations were “representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees.”
It added: “As the CEO is considered responsible for matters such as this, his re-election cannot be supported”.
However Glass Lewis, another shareholder adviser, recommended that shareholders back his re-election as the breach of the furlough scheme rules had not been proven.