Sports Direct owner Mike Ashley has withdrawn from the Bonus Share Scheme this month, following pressure from the City.
Ahead of the sports retailers’ full-year results tomorrow, Ashley has informed the board “he does not wish to be awarded any shares under the 2015 Bonus Share Scheme”, despite three attempts to find a bonus deal shareholders were happy with.
Ashley has told the board and Remuneration Committee that while the 2015 Bonus Scheme is in place he does not expect any share-based incentive scheme to be proposed by shareholders in relation to his role as executive director of Sports Direct.
It comes after pressure from shareholders who were not happy with the bonus award. They planned to vote against the re-election of the chairman Keith Hellawell and other board members at September’s AGM in protest.
Sports Direct chairman Keith Hellawell said: “Mike remains fully committed to achieving the scheme’s stretch targets. Regarding the allocation of shares, Mike’s focus is on ensuring that the scheme aligns all employees to achieve the company’s objectives. Following recent unhelpful speculation surrounding the potential allocation, he is determined to ensure that there is the maximum number of shares available for the eligible employees.”
The board voted through the new Bonus Share Scheme on July 2 with a split vote of 60.4% for it, which included 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.