Sports Direct investors have voted in favour of rewarding owner Mike Ashley with a bonus through a new share scheme.
It is the third attempt by the retailer to secure a bonus for Ashley, who owns 58% of Sports Direct. The retailer had to scrap plans for a vote on a share bonus scheme in April after investors baulked at a proposed £70m bonus for Ashley.
At today’s AGM the vote was split 60.4% for the new Bonus Share Scheme, which includes Ashley’s reward, and 39.6% against.
The plan will grant as many as 25 million shares, worth about £200m, to 3,000 employees. To achieve the payout, Sports Direct’s EBITDA has to reach £480m at the end of the 2016 financial year and then £750m by 2019.
Last year, the business posted annual underlying earnings of £287.9m.
Sports Direct non-executive chairman Keith Hellawell said: “Sports Direct’s Employee Bonus Share Scheme is one of the most wide reaching and successful employee reward schemes in the UK. The success of the scheme is demonstrated by the substantial shareholder value created over the last five years.
“The board and the remuneration committee responded to the feedback received from shareholders and today’s vote in favour of the resolution will ensure that the group continues to retain and motivate its hard-working employees.
“The resolution today also recognises the substantial contribution made by Mike Ashley over many years and, as demonstrated by the previous schemes, has the potential to create a further significant increase in shareholder value.”
Sports Direct is in the midst of a row with Adidas. The retailer accused the giant sports brand of being anti-competitive due to its restrictions over Sports Direct selling replica football kits in its stores.