Frasers Group, the retail company led by Mike Ashley, is under scrutiny from major shareholder advisory group Pirc due to concerns over its corporate governance practices. Pirc has recommended that investors vote against the reappointment of CEO Mike Ashley and chairman David Daly at the upcoming annual general meeting.

Pirc’s criticism stems from reports that Frasers Group subsidiary Sports Direct had asked employees to work while on furlough, indicating a corporate culture that does not prioritize fair treatment of staff. Pirc deems this a violation of best practice standards and believes it warrants a vote against the reelection of the company’s top executives.

Frasers Group has responded to the criticism by announcing a new £100 million bonus plan for its employees. The plan, which will be presented to shareholders at the meeting, aims to acknowledge and reward employees for their loyalty and hard work. It comprises two sub-plans: one offering cash bonuses of up to four weeks’ salary for eligible employees, and another involving share awards for high-performing workers. The latter may result in up to 10 employees receiving share awards worth approximately £1 million each.

However, the implementation of the bonus scheme is contingent on Frasers Group’s share price surpassing and remaining above £10 for a consecutive 30-day period during the performance period. Currently, the company’s share price is above £4. Despite this, Chairman David Daly expresses confidence in reaching this target, citing the success of the company’s elevation strategy.

In addition to the CEO’s reelection and the bonus plan, the Frasers board will also face pressure from animal rights activist group PETA to reinstate the ban on fur. PETA, which acquired a stake in the company earlier this year, will urge executives to adopt a no-fur policy company-wide, aligning with the prevailing sentiment of the British public.

As criticism mounts regarding Frasers Group’s corporate governance practices and treatment of employees, the introduction of the £100 million bonus plan is viewed as a strategic move to address concerns and recognize employees for their contributions. The outcome of the annual general meeting will determine the company’s future trajectory and its rapport with shareholders and stakeholders.

Useful Links:
1. For more information on Frasers Group and its corporate governance practices, visit Frasers Group Official Website.
2. To learn more about PETA’s advocacy for animal rights, visit PETA’s Official Website.