Sports Direct founder Mike Ashely’s future son-in-law set for £100m bonus when he takes over as CEO next year despite shareholder rebellion
Sports Direct founder Mike Ashley has forced through plans to hand his future son-in-law a bonus worth up to £100million despite a shareholder rebellion.
The billionaire tracksuit tycoon will step down as chief executive of his Frasers Group empire in May next year and hand the reins to Michael Murray, his daughter Anna’s fiance.
But independent shareholders yesterday revolted over a deal that will hand Murray £100million if Frasers’ share price hits £15 for 30 consecutive trading days in the next four years. Shares fell 1.1 per cent, or 7.5p, to 687p last night.
Successor: Mike Ashley will step down as chief exec of his Frasers Group empire in May next year and hand the reins to Michael Murray, his daughter Anna’s fiance (pictured together)
More than 55 per cent of independent shareholders who voted opposed the share scheme at the company’s annual general meeting.
Ashley’s holding of 64.8 per cent meant the motion passed, but the rebellion means independent shareholders have put a black mark against Murray before he has even started in the top job.
Just over half of independent shareholders also voted against executives’ pay during the pandemic, with anger focused on a £100,000 cash bonus and pay rise for the finance chief Chris Wootton.
Dozens of companies were criticised last year for paying bonuses to executives when they were accepting large amounts of Government support or cutting dividend.
Frasers Group – which includes Sports Direct, House of Fraser and Evans Cycles – accepted £80million in furlough cash and saved £97.5million in business rates relief.
Voting advisory groups had lined up to oppose Murray’s bonus, due to its size and focus on the share price, which they said can change independently of a chief executive’s performance.
Holding: Sports Direct founder Mike Ashley 64.8 per cent stake in Frasers meant the motion passed despite the rebellion
Glass Lewis and Pirc said the payouts were ‘excessive’ while Minerva Analytics said it was ‘unreasonably high’.
Last month finance chief Chris Wootton said that while Mike is ‘a bit of a dinosaur… Michael is young, fresh and youthful’.
Wootton yesterday also defended the company’s use of zero hours contracts, which were introduced for store workers in House of Fraser and Evans during the pandemic.
When he takes over, 31-year-old Murray, who is not an executive on the company’s board, will become one of the youngest bosses in the FTSE 250.
He has been credited with driving the strategy to win over young shoppers, re-build relationships with big brands such as Nike and Adidas, and improve the company’s stores.
But his promotion reignited criticism that Ashley, 56, who set up Sports Direct as a single store in Maidenhead in 1982, was trying to run the enlarged Frasers Group empire as a personal fiefdom.
Critics said the promotion ‘does not pass the sniff test’, however, many analysts supported the appointment saying he showed merit in his previous role.
His early years at the company were also laced with controversy as he was paid £17.5million as a consultant over six years, and his mother Nicola has also netted £100,000 for ‘design work’.
Independent retail expert Richard Hyman said: ‘Frasers Group has never really adhered to the sort of rules that big corporates are expected to run by, and this bonus shows it is unlikely that is going to change.
‘But Ashley’s methods have worked well for him and for his shareholders, so it is hard to argue against.
‘Although the City may not like it, it has done pretty well as a result of the business’s success.’