Sports Direct will pit itself against its shareholders in bonus battle

Sports Direct wants to grant 25 million shares, worth around £200m, among 3,000 employees, including Ashley, who also owns Newcastle United FC

Peter Byrne/PA Wire A Sports Direct shop
A Sports Direct shop

Sports Direct International will again pit itself against its shareholders as the retailer makes its third attempt to pass a bonus scheme for founder Mike Ashley at an investor meeting on Wednesday.

Two shareholder groups have already come out against the 2015 bonus scheme at the retailer, which runs around 670 sports stores in the UK and Europe.

Sports Direct wants to grant 25 million shares, worth around £200m, among 3,000 employees, including Ashley, who also owns Newcastle United FC.

The Local Authority Pension Fund Forum, which represents 60 local councils with combined assets of £125bn, and Pensions & Investment Research Consultants (Pirc) will recommend that their members reject the proposal.

A Pirc spokesman said: “Pirc is concerned that there are no individual limits in the bonus plan, and that individual awards may be excessive.

“We, like other shareholder groups, have long had concerns about remuneration schemes at Sports Direct.”

To achieve the payout the firm’s earnings would have to hit £480 million at the end of the 2016 financial year and rise to £750m by 2019.

Last year the business posted annual underlying earnings of £287.9m.

Ashley’s allocation of the bonus scheme will be decided later by the firm’s remuneration committee if the meeting passes the plan.

Sports Direct dropped a scheme to award Ashley more than £70m in April after shareholders raised concerns that it was not in line with corporate best practice and did not include other company executives.

The business initially tried to hand Ashley a bonus in September 2012, but again failed to win enough investor support.

Ashley, who is deputy executive chairman at the retailer, has not received a salary or bonus since the retailer floated in 2007 netting him £929m.

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