Ashley to get Sports Direct bonus if targets met
Sports Direct is to hand its founder Mike Ashley a shares windfall worth a potential £65 million – as long as the retailer keeps up its rapid growth.
The Newcastle United owner, who set up the business on leaving school in 1982 and was the sole owner until its stock market listing in March 2007, will get eight million shares if targets are met for this year and 2015.
Mr Ashley currently receives no remuneration but, as deputy executive chairman, Sports Direct said he had played a central role in growing its value from £2 billion in 2012 to a FTSE 100 Index-listed firm worth £5 billion today.
The company will seek approval for the incentive scheme at a shareholder meeting next month, although the shares will not vest until summer 2018. Mr Ashley, who is majority owner of the company, will not vote on the resolution.
The grant of the shares is conditional on the company achieving underlying earnings of £330 million in this financial year and £410 million in 2015, as well as a target in relation to net debt at the end of the next financial year. Company earnings were £287.9 million in the year to last July.
A previous scheme for Mr Ashley that would have delivered a £26 million windfall was rejected in a shareholder vote in the summer of 2012.
The company said its new proposal has already received support from its largest institutional shareholder, Odey Asset Management.
Sports Direct chairman Keith Hellawell said: “The board believes that Mike is one of the outstanding retailers of his generation and that all shareholders benefit from his ongoing commitment to Sports Direct.”
Part of Sports Direct’s recent success has been put down to the company’s employee bonus scheme, which last summer rewarded around 2,000 staff with shares worth around £68,000.
The 2011 staff scheme is also on track to reward more than 3,000 staff having already surpassed two of the four earnings targets.
Sports Direct has around 400 UK stores and operations in 19 countries in Europe. It also owns brands including Dunlop, Karrimor and Slazenger.