Mike Ashley’s Frasers Group said last night it would recommend a bonus scheme for incoming chief executive Michael Murray worth £100 million in shares if he meets a “challenging but achievable” target.
Murray, 31, who is the fiancé of Ashley’s daughter, will receive the stock if the retailer’s shares achieve a price of £15 for 30 consecutive trading days before October 7, 2025. The shares closed up 13½p, or 2.1 per cent, at 650p before the bonus statement was issued through the London Stock Exchange.
The company said: “The board believes that the significant increase in value of the shares to be achieved before Michael’s share option award vests is suitably challenging but achievable and would be evidence of the success of the group’s elevation strategy and Michael’s leading role in this.”
The board recommended an annual salary of £1 million. Murray, currently the group’s “head of elevation”, is set to succeed Ashley as chief executive in May 2022. The company said: “For the avoidance of doubt, the previous consultancy arrangements between the group and Mr Murray will cease on his assumption of the chief executive role.”
Shareholders will vote on the proposed bonus scheme at the annual meeting on September 29. Ashley owns 64 per cent of the company’s shares.
Ashley, 56, revealed his succession plans this month as the sportswear retailer announced a 94 per cent slump in profits, driven by writedowns in the value of its store estate. As well as Sports Direct, which Ashley founded in 1982, the group owns brands including Game, Evans Cycles and Jack Wills.
Sources said that Murray had been groomed for the role after showing that his strategy to push Sports Direct upmarket was paying off, with better relationships being established with Nike and Adidas. “Without brands, we don’t have a business,” Chris Wootton, Frasers’ chief financial officer, said.
Wootton added that Ashley would stay with the group as a director and would remain in charge of warehouse logistics and “things that he is very good at and enjoys”.
In its annual results, Frasers reported a 94.1 per cent drop in annual pre-tax profit from £143.5 million to £8.5 million, largely because of £317 million of impairment charges on its property assets, reflecting the group’s assessment of the risk of future lockdowns on shop sales and the shift to online shopping.
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Frasers Group to offer £100m bonus to incoming boss Michael Murray