Frasers Will Pay Its Incoming CEO $27 Million for Consultancy Work

(Bloomberg) -- Frasers Group Plc’s new chief executive officer will receive a 20.9 million-pound ($27 million) payment just days before he takes charge of the British retail group. 

The company behind Sports Direct and House of Fraser said it was awarding the payment to Michael Murray for his previous consultancy work at the group. 

Murray is not formally employed by Frasers but as “head of elevation” has advised it. He’ll take over as CEO on May 1.

Murray is engaged to the daughter of founder Mike Ashley, the former squash coach who turned one sportswear shop into a U.K. retail empire. Ashley announced the plan to appoint Murray as successor last year and will remain as an executive director. 

The company said the payment will terminate an agreement between Murray and Frasers, where he was to receive as much as 25% of the value created by property deals and consultancy advice. Frasers said in a statement Friday that the sum had been assessed by third-party experts. The formula for working out the value created has not been disclosed. 

Murray has already received more than 5 million pounds in prior years from this arrangement. 

Last year Frasers disclosed that Murray could also be in line for a bonus of 100 million pounds in shares if the U.K. retailer’s stock hits a “challenging but achievable” price target. 

Ashley, who previously owned Newcastle United football club, has been criticized for ignoring corporate governance norms at Frasers. This includes when Ashley failed to disclose his family link to his future son-in-law when Murray began working for the retailer. 

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