Mike Ashley’s Frasers faces shareholder revolt over exec bonus
Frasers Group, the retail empire owned by Mike Ashley, is facing an investor revolt over a bonus handed to its finance chief for “doing his job”.
Two influential shareholder proxies have urged the firm’s investors to slap down its executives’ pay package at its annual general meeting (AGM) on Thursday.
The dispute centres around a £100,000 bonus handed to Chris Wootton, the firm’s finance chief, earlier this year.
Frasers said the finance boss deserved the reward because of his successful negotiating of a new loan and revolving credit facility for the company. The loan deal is worth £3bn and will last until July 2029.
“The committee’s view was that this was a significant objective in the continued delivery of our elevation strategy,” the firm said in its annual report. But the shareholder advisory groups have taken issue with the bonus, which they say rewards Wootton for an achievement that should be treated as part of his normal role.
ISS, one top shareholder group, told investors: “The decision to award a discretionary bonus outside the standard framework is questionable, as the accomplishment appears to sit comfortably within a CFO’s normal remit and day-to-day job description.”
Glass Lewis, another leading investor proxy, said Frasers should have given shareholders a “more robust disclosure regarding the rationale for the award”.
The proxy pointed out that the firm did not meet the threshold for its performance-related long-term bonuses to be triggered last year, suggesting that Frasers used this one-off bonus to “prop up pay” regardless.
Pay packets under the scope
Wootton took £351,000 in salary, pension and short-term bonuses last year, while the group’s chief operating officer, David Al-Mudallal, took home £251,000.
Michael Murray, Frasers Group’s chief executive and founder Mike Ashley’s son-in-law, has waived his salary.
Proxy advisers have faced the City’s anger in recent years for campaigning against executives’ pay packets, which some have argued are already too low to attract the world’s top talent.
Ashley founded Frasers Group as Sports Direct in 1982, and it gained market dominance for selling sportswear at rock-bottom prices. But the retail tycoon and former Newcastle United owner has since begun a march into upmarket fashion with his luxury label Flannels.
The group snapped up struggling department store chain Harvey Nichols for about £40m last month and is seeking to gain control of Hugo Boss, a German fashion house.
Frasers Group declined to comment.