SPORTS Direct founder Mike Ashley stunned the City yesterday after pulling out of a controversial £200m bonus scheme just weeks after winning investors’ support.
The sporting goods giant said that after talks with the remuneration committee, Ashley told the board that he did not wish to be awarded any shares under the 2015 bonus scheme.
He has also promised not to claim a bonus until at least April 2019, when the scheme comes to an end.
The company has made three attempts over the past two years to reward Ashley, who does not receive a salary or a bonus for his role as executive deputy chairman.
The latest proposal to award the retail tycoon alongside his 3,000 staff was voted through earlier this month, despite fierce criticism from several institutional investor bodies, which opposed the lack of disclosure over how many of the 25m shares would be allotted to Ashley or to staff.
Sports Direct’s chairman Keith Hellawell yesterday said: “Following recent unhelpful speculation surrounding his potential allocation, he is determined to ensure that there is the maximum number of shares available for the eligible employees.”
The Institute of Directors (IoD), which had previously criticised Sports Direct’s board for “weak governance”, congratulated Ashley on his decision.
“By taking this step, he is helping improve external perceptions of Sports Direct’s governance, which will ultimately be beneficial to all stakeholders,” said the IoD’s director of corporate governance Dr Roger Barker.
The move led to speculation over whether the retailer, which publishes its full-year results today, will reintroduce a dividend, despite its stance to abstain from paying returns while it expands overseas.
Retail analyst Nick Bubb said: “I wouldn’t be amazed to see a final dividend and I would certainly expect a commitment to future payments, even with acquisitions.”
Shares rose 1.2 per cent to 713.5p.
TIMELINE: THE RETAILER’S BONUS BATTLE
Shareholders rejects plans to award Ashley a one-off bonus of around 8m shares worth around £25m at the time.
Sports Direct announces fresh plans to introduce a bonus scheme that would have awarded Ashley a £70m windfall.
The group cancels its shareholder meeting after it became clear that it did not have enough support to push the motion through.
Ashley sells around £200m of his majority stake in the retailer just days after the bonus scheme was rejected by shareholders.
Sports Direct proposes a scheme to reward “all eligible” staff, including Ashley, 25m shares if the retailer hits ambitious targets.
The scheme is backed by 60.4 per cent of investors at a five-minute meeting at Sports Direct’s Shirebrook headquarters.