Sports Direct has scheduled a shareholder meeting to try to win backing for a new bonus scheme to reward founder Mike Ashley.
In April the retailer had to scrap plans for a vote on a share bonus scheme as investors baulked at a proposed £70m bonus for Ashley. The scheme would have granted Ashley eight million shares but investors said its targets were not taxing enough. A similar plan was also rejected in 2012.
This morning it set out plans for a vote on a 2015 scheme, setting what it said were more “stretching” earnings targets over a longer timeframe that would be used to determine the size of the payouts.
The payout will depend on Sports Direct generating EBITDA of £480m in 2016, £570m in 2017, £650 in 2018 and £750 in 2019.
Sports Direct said if these performance targets are all met, 25% of any award would vest following the announcement of the company’s audited results for 2019 in July 2019 and 75% of the award would vest following the announcement of the company’s audited results for 2021 in July 2021.
Sports Direct 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 shareholder value created, with the share price reaching an all-time high in April this year and currently six times higher than when shareholders approved the 2009 Employee Bonus Share Scheme.
“The board and the Remuneration Committee have responded to the feedback received from shareholders to develop a long-term share incentive scheme which not only will continue to motivate the company’s employees but which also recognises and rewards the substantial contribution made by Mike Ashley over many years.
“Based on the stretching performance targets established, this scheme has the potential to create a further substantial increase in shareholder value.”
The meeting is set to take place on July 2.