Sports Direct shareholders reject proposal for Mike Ashley bonus

The sports giant was due to put the proposal to a vote at a general meeting on Friday but has cancelled this as it “became apparent that we had not been to secure the requisite level of shareholder approval”, according to non-executive director Dave Singleton.

Singleton, chairman of Sports Direct’s remuneration committee, said: “While the board is disappointed that this resolution will not now be passed, we respect shareholders’ views. We remain convinced of the benefit of aligning Mike Ashley’s interests with those of all other shareholders.”

Singleton said the outcome was “particularly disappointing” given that when it originally proposed a bonus scheme for deputy executive chairman Ashley in September 2012 it narrowly missed the required support to pass it.

Sports Direct intends to seek approval for a 2015 bonus share scheme which it will put forward for a shareholder vote in its AGM in September 2014.

The 2015 scheme will be open to all eligible employees and members of senior management including Ashley. 

If approved, the bonus scheme will initially grant an option of 25 million ordinary shares in the group, amounting to approximately 4.2% of the issued share capital. The options are conditional upon the group meeting EBITDA targets of £480m in its 2016 financial year, £570m by 2017, £650m by 2018 and £750m by 2019.

Ashley will not vote on the resolution.

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 this week and now almost seven times higher than when the 2009 Employee Bonus Share Scheme was approved by shareholders.”