Sports Direct owner Frasers Group has offered the retailer’s future chief executive a £100m bonus if he can more than double the share price.
Mike Ashley’s retail group put forward the bonus plan for Michael Murray when he takes over in May 2022. However, he can only collect on it if share prices reach from £6.50 to £15 for 30 consecutive trading days before October 2025. The company describe it as a “challenging but achievable” target.
Mr Murray, 31, engaged to marry Mr Ashley’s daughter Anna, currently holds the position of “head of elevation” at Frasers. This means he is in charge of transforming the business and modernising stores. When Mr Murray takes over, Mr Ashley will step down as chief executive but will stay on the board as a director.
The board of Frasers Group, which owns Sports Direct and House of Fraser, also recommend Mr Murray receive a £1m yearly salary. They will vote on the proposed bonus scheme on 29 September at their annual general meeting.
Facing criticisms
Mr Ashley, 56, founded Sports Direct in 1982, and has been one of the most prominent figures on the High Street Since. The group changed its name from Sports Direct International to Frasers Group in December 2019 after taking over House of Fraser. However, stores kept the Sports Direct brand, and the business tycoon retains 64% of the group.
In 2007, the company listed shares on the stock exchange at a price of 300p, and in early 2014 prices surged to over 900p. The share price has recently been hit though due to impacts of Covid on retailers, and concerns over working conditions.
In 2016, Sports Direct pledged to end zero-hours contracts and offer employees guaranteed hours. But unions accuse the firm of breaking that promise. The company continues to receive criticism for recruiting workers on zero-hours contracts during the pandemic.
The company board believes that the significant increase in share value before Mr Murray’s reward would prove “the success of the group’s elevation strategy and Michael’s leading role in this”.
Mr Murray has worked for the group for a number of years. But his position at the company attracted attention following reports of millions of pounds in payment for consultancy fees.
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