Mike Ashley Succeeds At Last With Bumper Payout
At the fourth attempt, Mike Ashley has succeeded in pushing through a bonus share scheme which will see the Newcastle owner get what he believes to be his due reward for the added value he gives Sports Direct. This added value including free worldwide promotion of Sports Direct and related brands via Newcastle United.
Shareholders had previously thwarted Ashley’s attempts to basically award himself tens of millions of pounds worth of bonus share, however Wednesday morning saw him (figuratively) popping the champagne corks.
The scheme will see 25m bonus shares in Sports Direct awarded, depending on hitting targets, to Ashley and around 3,000 permanent staff. The Newcastle owner is expected to benefit from a lion’s share of the total, a figure which is close to £200m at today’s prices but which would be worth so much more if the company hits its targets.
Amongst the opposition was the Local Authority Pension Fund Forum which had told its 60 member funds to oppose the scheme, with Chair Kieran Quinn saying that the scheme created an overwhelming bias in favour of Ashley and gave, “…the impression that he’s creating the scheme for himself.”
The influential Institute of Directors (IoD) also lobbied hard before the vote;
“Sports Direct is seeking to push through excessively generous pay arrangements for Mr Ashley. The IoD is concerned that this is suggestive of weak underlying governance at the company.
“This raises doubts as to whether the board is acting as an effective independent check on Ashley’s power.”
One of the main things to anger voting shareholders was the fact that Mike Ashley and the board had refused to confirm what proportion of the 25m shares that the SD founder would be entitled to.
The meeting lasted only five minutes during which Mike Ashley refused to comment, the majority shareholder leaving in his helicopter as soon as it ended.
Leaving SD’s non-executive Chairman Keith Hellawell to make the following statement;
“…today’s vote in favour of the resolution will ensure that the group continues to retain and motivate hard-working employees.
“The resolution also recognises the substantial contribution made by Mike Ashley over many years and, as demonstrated by the previous schemes, has the potential to create a further significant increase in shareholder value.”
This Mike Ashley's "I really want to be here" face pic.twitter.com/KGB1MLRNx4
— Nic Fildes (@LovesickHank) July 2, 2014
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