Mike Ashley remained silent as his Frasers Group retail empire urged investors to back a staff bonus scheme worth potentially more than £100 million at its annual shareholder meeting on Wednesday.
The tycoon kept quiet during the 25-minute meeting at the company’s headquarters in Shirebrook, Derbyshire.
It followed a tumultuous summer which saw the retail giant hit by enforced store closures, after facing scorn over appeals to the Government that Sports Direct outlets should remain open with essential status.
On Wednesday, the group, which also owns House of Fraser, said its new bonus scheme would be open to the “vast majority” of its 30,000 workers, who will receive either cash or share awards.
But the payout will only be triggered if shares more than double in value within the next four years to at least £10 and for a sustained period.
The group’s chief finance officer, Chris Wootton, told shareholders that it is a “challenging target but achievable” following progress in the company’s “elevation strategy”.
City analysts expressed scepticism over Fraser’s £10 share price target.
Jonathan Pritchard, a retail expert at Peel Hunt, said: “There’s an enormously higher profit base that they’re alluding to to get to £10 a share.
“I’m all ears as to the road map of how to get to £10.”
Shares in the group closed at 360.8p on Tuesday.
Results of the AGM vote showed investors overwhelmingly backed the employee bonus scheme, with 99.97% giving the plans the thumbs-up.
Investors also approved the re-election of Mr Ashley and chairman David Daly, with 99.2% and 99.7% of votes respectively made in favour.
This came despite Mr Ashley and Mr Daly facing opposition from major shareholder advisory firm Pirc, which advised investors to vote against their re-election after allegations that the company had asked staff to work during furlough.
Pirc said this was “representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees”.
During the meeting, Mr Wootton said the company is “confident” that it followed the rules regarding furlough and has since discussed the matter with HMRC.
Pirc said it is also opposing Mr Daly’s re-election on claims that there is a lack of action over increasing ethnic and cultural diversity in the boardroom and for not setting up a sustainability committee.
But Pirc gave the staff bonus scheme the thumbs-up, given that it is “open to all employees on an equal basis and has a strong participation rate”.
The company last made a bonus scheme payout to employees in 2017 when it shared a £43 million pot between 2,000 staff.
The scheme is dependent on employee length of service, with those having worked at the group for four years or more potentially in line for a cash bonus worth up to four weeks’ salary.
The so-called Fearless 1,000 would be entitled to possible share payouts, with the top 10 performers receiving awards worth a possible £1 million while the remainder could pick up shares worth between £50,000 and £500,000.
The scheme will not include the group’s directors and consultants.
Cally Price, Frasers Group workers’ representative to the board, said: “Our workforce is our lifeblood.
“I hope that all shareholders will recognise our efforts by voting to give my colleagues and I the opportunity to share in the future success of the company.”
At the meeting, Mr Wootton also reiterated the company’s warning that it could shut some House of Fraser stores if the Government does not change the current business rates system.
“As we’ve said before, we have some House of Fraser stores where we have no rent to pay but still lose money,” he said.
“We’ve said a number will have to close unless the Government gets on board with a business rates scheme which is fit for purpose.”
Retail stores have seen a break in business rates payments until April 2021 but will then see the system restart with payments based on valuations from 2015.
The group has said that current valuations fail to account for a slump in property values and called for the next revaluation to be pushed forward from 2023.
Frasers’s full-year results in August showed revenues for the year to April 26 rose 6.9% to £3.96 billion, but pre-tax profits were down 12.9% to £101 million.