Bottom Line: Ashley deserves every penny of his reward
ATOP HIS impressive beer gut, Mike Ashley’s face has the healthy glow of a man who enjoys a carrot. Yesterday, Sports Direct dangled a huge one in front of its chairman in the form of a £67m share bonus – subject, of course, to the company’s profitability over the next two years.
On past performance, that shouldn’t be a problem for Ashley. In the seven years since he brought Sports Direct to market, the Home Counties lad hasn’t received a salary or bonus. But over that period he’s helped the share price more than triple, creating a retail giant with an international reach and a market capitalisation of around £5bn. It’s not been an easy ride. Eighteen months ago a warning from the Association of British Insurers saw shareholders vote down a similar share package – that time worth just £26m. But since then the stock has seen a dramatic rise in value – up 88 per cent in the past 12 months – a feat that yesterday saw Ashley called “one of the outstanding retailers of his generation” by chairman Keith Hellawell.
Ashley’s uncompromising way of doing business has won over staff and helped Sports Direct grow while competitors withered and died, and that’s as much as any investor can ask for, as his loyal fans made clear yesterday by driving shares up another 3.59 per cent.
Next, they’ll be waiting with bated breath to see what he has planned for Debenhams, after a recent deal gave him an option to take up to a seven per cent stake in the struggling department store.
Analysts suggested yesterday a cash offer would push Sports Direct’s debt above agreed levels, making an outright bid unlikely. But whatever Ashley has in store, it’s bound to be worth sticking around for.