The 'fearless 1,000' or just a PR stunt

Listen to the radio, pick up a newspaper, or scroll the headlines on your phone this week and, chances are, you’ll have seen that Fraser Group is poised to pay out life changing sums of bonuses to its staff. Over £100 million in bonuses available for employees from the shop floor right through to head office, excluding the group directors and consultants, as long as they have demonstrated outstanding performance. And, for the very best performers, dubbed the ‘fearless 1,000’, share awards worth as much as £1million.

Fraser Group is the owner of the much beleaguered Sports Direct, amongst others, with the infamous Mike Ashley at its helm. Investors in the retail giant overwhelmingly backed the new bonus scheme on Wednesday as well as agreeing to re-elect Mike Ashley and David Dally as chief executive and chairman respectively.

But, the cynical PR in me, can’t help but wonder if this truly is as generous as it seems. Has Fraser Group purely pulled off some ‘good’ press coverage with promises it won’t meet? We all know that the retail sector has been struggling, long before the pandemic and it’s not just these headwinds that retailers under Mike Ashley’s ownership have had to face.

Bear with my cynicism… there are some fairly tough criteria to hit before this hugely generous bonus scheme kicks in. Fraser Group’s share price has to stay above £10 for 30 consecutive days in the next four years. The last time it came even close to £10 was in 2014 when it reached a high of £9.22 and today it opened with a share price of £352.60. So for all my market knowledge £10 a share, and for 30 days, seems pretty ambitious.

It’s most recent full-year results show that pre-tax profits for the year to April 26 were 12.9 per cent down to 101million. It’s clear that the company has some punchy growth plans and targets ahead. But, for its employee’s there is only so much that they can do to help reach the £10 a share criteria. External factors, and internal governance, will weigh heavily on what happens to the bonus payments and if 2020 has taught us anything it is that no one knows what’s around the corner.

So, all in all, I don’t think it’s as generous as it seems. Employees will hold onto the promise of a bonus within the next four years, they will continue to work incredibly hard, and some even harder to enter the select ‘fearless 1,000’ group, and those that were pondering a change in career might just stay a bit longer.

I might be wrong, and you can let me know in four years’ time, but I think it’s highly unlikely that Fraser Group employees will see any of the £100 million they have been promised unless the group has something miraculous tucked up its sleeve.