Frasers defends zero hour work as investors revolt against bonuses | Fraser Group

The group that owns Sports Direct has apologized for its use of zero-hour contracts, calling them “tough decisions that don’t work for everyone” as it faced an investor rebellion over the high salaries of its top bosses.

More than half of the independent shareholders of Frasers, which also owns House of Fraser and Evans Cycles, have rejected the group’s plans for a £ 100million bonus program for its new chief executive, Michael Murray, and the payment of ‘a £ 100,000 cash bonus and salary. increase for its CFO, Chris Wootton.

Frasers sought approval of the bonus programs at a low attendance annual meeting on Wednesday, with just two independent shareholders attending the 9 a.m. event at the group’s headquarters in Shirebrook, Derbyshire.

However, just over 55% of independent shareholders voted against the group’s future compensation policy, indicating disapproval of the £ 100million bonus program, while just over 50% voted against the report. compensation, indicating a disapproval of last year’s cash bonus for Wootton.

Despite the protest vote, the measures were approved thanks to the support of the group’s founder and chief executive, Mike Ashley, who owns 64% of Frasers’ shares.

Ashley sat in a fancy white shirt at a table outside the meeting but did not speak, stepping out just after formal proceedings were completed. It later emerged that 26.5% of independent investors had not supported his renewal in one of the assembly votes, due to concerns over corporate governance at Frasers.

Murray, Ashley’s daughter’s fiancé, is set to take over the management of the retail group next year. Under the new compensation policy, he will receive just over £ 100million if Frasers’ share price reaches £ 15 for 30 consecutive trading days in the four years from October 7, 2021. , compared to around £ 7 at the moment. The bonus would be in addition to his base salary of £ 1million per year. Wootton could receive up to £ 9million under the scheme.

Influential advisory groups Pirc and Glass Lewis have advised shareholders to vote against the compensation plan at the annual shareholders’ meeting, signaling “overpayments,” while proxy voting service Minerva Analytics said shareholders might view the final payment as “unreasonably high” despite the stretch. target defined.

Wootton justified paying large bonuses after agreeing to £ 80million in leave aid and £ 97.5million in trade tariff relief around the world last year, saying: ‘The Commercial tariff relief did what it was supposed to do and supported loss-making stores, especially House of Fraser. . “

He told the annual meeting of shareholders that Frasers had done well to keep open more than 40 of the 59 House of Fraser stores he bought from administration in 2018 “given the failure of this business [was] when we took it back. He added: “The government support has really helped us keep so many stores. “

Wootton suggested that the zero-hour contracts, which Frasers introduced for House of Fraser and Evans store workers over the past year, have helped keep those businesses afloat. “You have to make tough decisions that don’t work for everyone for the long-term benefit of the business,” he said.

Frasers has long used zero-hour contracts – which have been criticized by workers’ rights groups for offering no guarantees of regular working hours – at its Sports Direct and Flannels outlets and incorporated them into its new acquisitions during the pandemic.