News Column

If Mike Ashley would like a bonus he should join the retailer's regular scheme

June 11, 2014



Sports Direct

If Mike Ashley would like a

bonus he should join the

retailer's regular scheme

Sports Direct has finally got one thing right: if Mike Ashley, founder, 58% shareholder and most important executive, wants to earn a bonus he should join the company's regular scheme rather than have a tailor-made arrangement. In every other respect, though, the non-executives' approach is as cack-handed as before.

A total of 25m shares, currently worth about pounds 200m, have been earmarked for the latest scheme for the top 3,000 permanent employees (the 90% of staff on zero-hours contracts, it hardly needs saying, don't qualify) but the company refuses to say how many would be allocated to Ashley.

Given the kerfuffle over the Ashley-only pounds 70m scheme just a couple of months ago, the silence is plain arrogant. Ashley's slice is the first piece of information any outside shareholder would wish to know.

It looks as if Sports Direct, having failed to get a potential mega-bonus for Ashley through the front door, is trying to smuggle one in via the back entrance. This time the shareholders can't say no to Ashley's incentive without jettisoning the scheme designed for 3,000 people.

Fortunately, the non-executives, led by chairman Keith Hellawell, are impossible to embarrass. Every time their bonus designs for Ashley are knocked down, they come back for another try. Shareholders, then, should not be afraid to tell the board to cough up the relevant information or risk a no vote at the next month's meeting.

It is true, as Sports Direct says, that the profit targets are demanding - top-line profits would have to more than double to pounds 750m in 2019. But if the bonus scheme is crucial to achieving that goal, full disclosure should cause no problem for Hellawell & co. NP



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Source: Guardian (UK)


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