Frasers Group, previously known as Sports Direct, has secured shareholder approval for a new executive share scheme that could potentially earn its incoming CEO, Michael Murray, £100 million ($137 million). Murray, who is currently the company’s “head of elevation” and the partner of founder Mike Ashley’s daughter, has played a crucial role in Frasers Group’s transition and its efforts to establish itself in the upmarket segment of the fashion and sports retail industry.

During the annual investor meeting, 86.6% of votes were in favor of the bonus scheme, while 13.4% opposed it. As the majority shareholder, Mike Ashley owns 64% of the company’s equity. Prior to the meeting, investor advisory groups had advised shareholders to vote against the scheme. However, despite this opposition, the bonus scheme was approved.

The terms of the scheme state that Murray will receive £100 million worth of Frasers stock if the share price reaches £15 for 30 consecutive trading days before October 2025. As of now, the share price is currently lower than £7. Frasers Group considers this target to be suitably challenging yet achievable, viewing it as a key indicator of the company’s successful elevation strategy, with Murray taking a leading role in its execution.

In addition to the potential bonus, Murray will be entitled to an annual salary of £1 million. His appointment as CEO is scheduled to commence on May 1, 2022, where he will succeed Mike Ashley in this position.

The approval of the bonus scheme has sparked debates and raised concerns among investors and industry observers. Criticism of such schemes often revolves around the potential for excessive rewards for executives, especially when the company’s share price is below the target level. However, supporters argue that the potential reward reflects Murray’s significant contributions to the company’s growth and achievements.

Frasers Group has been undergoing a strategic transformation in recent years, distancing itself from its previous Sports Direct image. The company has been striving to enhance its reputation and move towards a more premium positioning. This has involved acquisitions of high-end fashion retailers like Flannels and House of Fraser.

As Frasers Group prepares for a new era under the leadership of Michael Murray as CEO, it remains to be seen how the executive share scheme and his strategic guidance will impact the company’s future growth and performance.

[Optional Links:
1. Reuters Article
2. BBC Report]