Frasers calls on shareholders to back £100m staff bonus

Mike Ashley’s retail empire Frasers has urged investors to back its staff bonus scheme worth potentially more than £100 million at its annual shareholder meeting on Wednesday.

The company behind Sports Direct and House of Fraser said the bonus scheme would be open to the “vast majority” of its 30,000 workers, who will receive either cash or share awards.

But the payout will only be triggered if shares more than double within the next four years to at least £10 and for a sustained period.

Frasers insisted the share price target was “realistic”.

Shares in the group closed on Tuesday at 360.8p.

It comes as Frasers – which is holding its annual general meeting virtually for investors from its Shirebrook headquarters – faces opposition to the re-election of Mr Ashley and chairman David Daly from a major shareholder advisory firm.

Pirc has advised investors to vote against Mr Ashley after the group allegedly asked staff to work during furlough.

Pirc said this was “representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees”.

It is opposing Mr Daly’s re-election on claims that there is a lack of action over increasing ethnic and cultural diversity in the boardroom and for not setting up a sustainability committee.

But Pirc has given the staff bonus scheme the thumbs up, given that it is “open to all employees on an equal basis and has a strong participation rate”.

The company last made a bonus scheme payout to employees in 2017 when it shared a £43 million pot between 2,000 staff.

David Daly, chairman of Frasers Group, 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.”

The scheme is dependent on employee length of service, with those having worked at the group for four years or more potentially in line for a cash bonus worth up to four weeks’ salary.

The so-called Fearless 1,000 would be entitled to possible share payouts, with the top 10 performers receiving awards worth a possible £1 million while the remainder could pick up shares worth between £50,000 and £500,000.

The scheme will not include the group’s directors and consultants.

Cally Price, the Frasers Group workers’ representative to the board, said: “Our workforce is our lifeblood.

“I hope that all shareholders will recognise our efforts by voting to give my colleagues and I the opportunity to share in the future success of the company.”

The 2011 scheme saw the group pay out life-changing amounts to some workers, although Mr Ashley has faced criticism for his preference for zero-hours contracts.

Frasers’s full-year results in August showed revenues for the year to April 26 rose 6.9% to £3.96 billion, but pre-tax profits were down 12.9% to £101 million.