Sports Direct boss Mike Ashley is planning to implement a £50m bonus scheme that could result in 2,000 employees receiving a year’s salary in free shares.
If the retailer meets profit targets over the next two years, staff would get an average of £25,000 each.
It is thought that Ashley will begin consultations with shareholders about the scheme this week.
Under the scheme, staff will get the payouts if Sports Direct makes more than £200m of underlying profit by the 2010/11 financial year.
When the retailer floated two years ago, it made £188m in profits.
Only full-time staff who have been with the retailer for more than two years are eligible, and they would have to hold on to the shares for at least two years before they could cash them in.
Sources say the scheme is designed to reproduce the entrepreneurial culture the retailer had when it was a private company.
The share payout would dilute Ashley’s 71 per cent stake in the retailer and leave him ineligible for any bonus payment, according to the Sunday Times.
Shareholders may deem the proposal controversial because the payout would in effect hand back any gains made since the retailer floated.