Frasers Group reacts to CEO criticism with £100m bonus plan
A major shareholder advisory group has recommended Frasers Group investors to vote against Mike Ashley’s reelection at the annual general meeting this Wednesday over criticism of the company’s corporate governance.
Shareholder advisor Pirc said reports that some workers at Sports Direct had been asked to work while on furlough were “representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees”.
The consultancy, which provides corporate governance advisory services, said shareholders should also vote against the reelection of chairman David Daly.
On Wednesday morning, Frasers responded to the criticism with the announcement of a company bonus scheme that “could be worth in excess of £100 million”. The plan, being put before shareholders today, is designed to benefit workers for their loyalty and hard work.
The scheme is split into two sub-plans, where either cash bonuses or share awards can be received. Cash bonuses of up to four weeks salary will be available for eligible and qualifying workers, while the share bonus plan involves awards open to a thousand workers who demonstrate “outstanding performance”. The company said that up to 10 of these performers could each receive share awards potentially worth around £1 million.
If approved, the scheme will crystallise if Fraser’s share price reaches and stays above £10 for 30 consecutive days during the performance period. Currently, the company’s share price is above £4.
David Daly commented: “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.”
On Wednesday, the Frasers board will also face an appeal from PETA to reinstate its ban on fur. The animal rights activist group, which acquired a stake in the company in February, is expected to ask executives at the AGM: “When will the board listen to the more than 90% of the British public that rejects fur and adopt a no-fur policy across Frasers Group?”
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