Sportswear company said it ‘remains committed to implementing a scheme to recognise the ongoing substantial and essential contribution of Mike Ashley’
Sports Direct is attempting to reintroduce a bonus scheme that could hand Mike Ashley, the company’s majority shareholder, a £39m windfall.
The sportswear company said it “remains committed” to introducing its “Super-Stretch Bonus Share Scheme” just three months after a shareholder revolt forced it to freeze plans for the generous bonus scheme.
The company said it withdrew a shareholder vote on the scheme from its AGM in September because “it was clear to the board that a significant minority of shareholders had some concerns regarding certain aspects of the scheme”. However, on Thursday it said: “The board remains committed to implementing a scheme to recognise the ongoing substantial and essential contribution of Mike Ashley (who receives no remuneration), and, as such, the board is reviewing shareholders’ feedback.”
Ashley, who controls 71% of Sports Direct and also owns Newcastle United football club, could be awarded 10m shares, worth £39m at today’s prices. The shares would vest in 2018 if the company meets performance targets.
The previous bonus scheme would have awarded Ashley a one-off bonus of 8m shares, worth £32m, if the retailer has reached targets over three years. The company dropped a vote on the previous scheme after proxy votes counted before the meeting indicated it had failed to win enough shareholder support to push the motion through.
Powerful shareholder bodies Pirc and the Association of British Insurers (ABI) had issued “red-top” alerts warning investors to vote against the previous plan, which did not include other Sports Direct bosses and only accounted for one measure of the company’s performance.
News of the revised bonus plan came as the company reported a 25% increase in first-half profits due to the London 2012 Olympics and Paralympics. “There is no doubt that Team GB’s outstanding performance has helped increase the awareness and popularity of sport across the UK, and that we have maintained our position as the consumers’ champion,” Dave Forsey, Sport Direct’s chief executive, said.