MIKE Ashley looked thoroughly bored at yesterday’s Sports Direct meeting, seemingly fed up with all the commotion surrounding its latest attempt to pay him a hefty bonus.
One might have thought he’d be used to it. An extremely divisive figure, often ridiculed and reviled in the football world, the bolshie and controversial way by which the plan finally passed was somewhat fitting.
But perhaps Ashley was right to maintain a sombre mood. Previous bonus conditions were too soft for investors to accept, so this time the firm went to the other extreme.
Sports Direct must more than double its profits by 2019, with earnings before interest, depreciation, tax and amortisation – known as Ebitda – expected to hit targets of £480m in 2016, rising to an ultra-ambitious £750m in 2019.
And if it misses any of the goals between now and then, neither Ashley nor any of the shop’s lower-ranked staff will get a penny. This is a bonus that may never be paid.
So shareholders should be happy, right? Well they’re certainly not. The rebellion yesterday was nearly 40 per cent, following deafening complaints that accused the company of pushing through its plan in an opaque and unreasonable manner.
With relations marred, investors must ask themselves some tough questions. Can principles be put to one side, so long as returns are strong? Or, in the long run, is good governance too crucial to ignore?
This bonus plan may have passed. But somehow, yesterday, everyone ended up looking glum.