11th Mar 2014 11:25
LONDON (Alliance News) - Sports Direct International PLC Tuesday said it plans to reward its founder, deputy Chairman and biggest shareholder, Mike Ashley, with share options worth more than GBP65 million, money it says is due to him for the company's strong performance as a listed company.
Billionaire Ashley, who has a 61.72% stake in the business he founded in 1982, has not been paid for his executive role at the company since the business was listed in February 2007, despite two previous attempts by the board to reward him.
Sports Direct said its board has therefore decided to propose to shareholders that he be given options over eight million shares in the company, a further 1.3% stake. Ashley would not vote on the proposal, which has the support of the company's largest institutional shareholder, Odey Asset Management, Sports Direct said in a statement.
"Since September 2012, the company's market capitalisation has increased from less than GBP2 billion to approximately GBP5 billion. The board believes that Mike Ashley is central to this value creation and that shareholders continue to benefit from his on-going commitment and involvement with the business," it said.
The option grant would come with conditions. The award will be conditional on Sports Direct achieving earnings before interest, tax, depreciation and amortisation of GBP330 million for the current financial year which ends in April, and GBP410 million in fiscal 2015, as well as a net debt to Ebitda ratio of 1.5 time or less at the end of the 2015 fiscal year.
The award would vest in July 2018 if all the performance targets are met.
Sports Direct made Ebitda, excluding exceptional costs and some other charges including the costs of previous company share bonus schemes, of GBP287.9 million in fiscal 2013, up from GBP235.7 million in fiscal 2012. Its net debt was 0.58 times Ebitda including all items at the end of fiscal 2013.
The board had in 2011 said it intended to include Ashley in an executive bonus scheme it awarded for that year. However, Ashley wasn't included in the end, even though other executives got awards. A previous attempt to reward him in the 2009 bonus award was rejected by shareholders concerned about the performance targets that were attached to the award, according to reports at that time.
Shareholders will get the chance to vote on the latest proposal at a general meeting on April 4.
Sports Direct shares were up 3.2% at 835.00 pence Tuesday morning, making the proposed Ashley option award worth GBP66.8 million.
By Steve McGrath; [email protected]; @stevemcgrath1
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