News Column

New attempt by Sports Direct to award Ashley cash incentive

June 10, 2014

Zoe Wood and Jennifer Rankin



Sports Direct yesterday unveiled a new plan to reward its billionaire executive deputy chairman, Mike Ashley - its third attempt to hand him a multimillion-pound incentive - but was immediately criticised by shareholders who bemoaned a lack of transparency and consultation.

In April investors vetoed a pounds 73m bonus for Ashley, the second time they had blocked an award for the tycoon, who is the company's founder and largest shareholder.

In an attempt to get round investor resistance, the company returned with another proposal yesterday - this time enrolling Ashley in the company-wide staff bonus scheme. The plan hands members 25m free shares - worth just over pounds 200m at the current share price - if the firm doubles earnings by 2019.

But Sports Direct did not spell out how many executive directors or staff would be enrolled or how shares would be allocated. The vast majority of Sports Direct workers, mostly employed on zero-hours contracts, will get nothing.

"It's extremely disappointing that they have proposed this scheme without any prior consultation," said one investor, who declined to be named. "There is also no detail as to any individual allocations, which is unhelpful."

The failed bonus scheme in April was the second attempt by Sports Direct's board to reward its founder in recent years. A previous proposal was knocked back by shareholders because of concerns over the related performance targets.

Shareholders have now been summoned to a general meeting on 2 July to vote on the revised plan.

A company spokesman said no decision had been made on Ashley's share of the bonus. Ashley receives no salary, but owns 58% of the shares, after reducing his stake by 4% earlier in the year.

Sports Direct, which has more than 600 shops in Europe, including 400 in the UK, is expected to announce pounds 330m in earnings when it unveils its 2014 results in July.

Founder Mike Ashley receives no salary from Sports Direct but still owns 58% of its shares after reducing his stake



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Source: Guardian (UK)


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