Bottom Line: Reward scheme pays off for all

 
Elizabeth Fournier

AS PROFITS at Sports Direct soared by 40 per cent yesterday, chief executive Dave Forsey waxed lyrical about how important the group’s employee incentive scheme had been in driving performance.

Even if you’re not one of the 2,000 staff getting three times their salary in shares later this month, it’s hard to argue with his logic. Sports Direct shares have risen more than 1,000 per cent since the scheme was introduced in 2009. Its objective – to retain staff and make them more involved in the company – seems to be paying off. At the same time, the firm sensibly pulled back from awarding chairman Mike Ashley his so-called super-stretch bonus payout. It was unpopular with investors and there’s no doubt now that Ashley – who holds a 70 per cent stake – can be rewarded in other ways. Analysts are even predicting the share price could smash through 700p in the next two weeks. If that happens, it’s not only employees who will be rewarded for their loyalty.