Ashley U-Turn On 'Big' Sports Direct Bonus
Mike Ashley, the founder of Sports Direct, has announced he will not be eligible for a big bonus after all, despite winning a two-year battle for it with investors.
The billionaire - who owns Newcastle United - confirmed on Wednesday he was withdrawing from the £200m employee incentive plan because of speculation over his share allocation.
The scheme had been put to shareholders four times before getting final approval earlier this month - despite continuing criticism from lobby groups including the Institute of Directors.
The four-year plan - which is due to vest in 2019 - has the potential to grant 25 million shares worth more than £180m to 3,000 employees.
Mr Ashley, who holds a 58% stake in the retailer, has never taken a salary or bonus but netted more than £900m in its 2007 flotation and has raised more cash since through block share sales.
The company had fought a bitter battle with other investors for Mr Ashley to be rewarded in the bonus scheme round after a previous plan recently netted some 2,000 staff shares worth around £68,000.
But Sports Direct chairman Keith Hellawell confirmed his withdrawal in a statement, which read: "Following recent unhelpful speculation surrounding his potential allocation, (Mr Ashley) is determined to ensure that there is the maximum number of shares available for the eligible employees."
The Local Authority Pension Fund Forum was among those who had levelled criticism at the plan, claiming it was inappropriate to establish an incentive plan with a single board member in mind.
Forum chairman Kieran Quinn had said: "This arrangement creates a bias in favour of Mr Ashley as well as the impression that he is creating the scheme for himself."
To achieve the payout in 2019, the firm's earnings will have to hit £480m at the end of the 2016 financial year and rise to £750m by 2019.
In results due this week, Sports Direct is expected to report earnings of around £327.1m.