Ashley facing nepotism claim in CEO plan
Mike Ashley: handing over top job
Frasers Group is facing renewed scrutiny after majority owner Mike Ashley’s decision to hand over running of the retail business to his future son-in-law.
Michael Murray, 31, who is a property consultant and “head of elevation” but does not sit on the group’s board, will become one of the youngest CEOs in the FTSE 250.
He is engaged to Mr Ashley’s daughter Anna and has been credited with winning over younger shoppers and developing the firm’s links with big brands.
However, the plan to install him at the helm of the group has drawn claims of nepotism against Mr Ashley who has previously been accused of trying to run a publicly-listed company like a private fiefdom.
Independent retail analyst Andrew Busby said there “needs to be a level of competence for a chief executive” while retail consultant Nick Bubb added: “Investors might reasonably want to know why Mr Murray is not even on the current board and whether his promotion reflects merit rather than nepotism.”
The board yesterday unveiled figures showing Mr Murray had received a further £2.5 million in fees, taking his total remuneration to £17.5m over six years.
His supporters say he has played a pivotal role in driving the group’s transition from bargain-based retailer Sports Direct to a more upmarket group that has been rewarded with a rise in its shares.
Some will argue that his personal relationship with Mr Ashley is irrelevant and point to companies such as News Corp which has operated successfully in the public sphere while being run by the Murdoch family.
It is currently proposed that Mr Murray will assume the role of CEO on 1 May 2022. A reward and remuneration package, subject to shareholder approval, is being thrashed out.
The group said its elevation strategy “is transforming the business and receiving positive feedback from consumers and our brand partners, especially on projects such as the new Oxford Street Sports Direct which opened in June 2021.
“The board consider it appropriate that Michael leads us forward on this increasingly successful elevation journey.
“Should Michael Murray assume the CEO role, Mike Ashley would step down from the CEO role at the same time but would remain on the board as an executive director.”
The company , which includes Evans Cycles, revealed that its profits plunged for the past year after sales were impacted by enforced high street closures during the pandemic.
Pre-tax profits dived by 94.1% to £8.5m for the year to April 25, compared to £143.5m in the previous year.
It warned that it fears restrictions on shop openings could return, meaning that it has not given the usual guidance on how it expects to perform financially this year.
Mr Ashley, 56, who is also embroiled in ongoing battle over his ownership of Newcastle United Football Club, said: “The group is continuing to invest in its physical and digital elevation strategy and our omni-channel offering is growing in strength.”
Shares in Frasers Group, which also owns Sports Direct, fell 0.2 per cent, or 1.5p, to 613.5p.