16th Jul 2014 07:00
LONDON (Alliance News) - Sports Direct International PLC said Wednesday that Executive Deputy Chairman Mike Ashley, has withdrawn from the company's 2015 Bonus Share Scheme.
In an about turn after extensive discussions with the board and shareholders as well as revised bonus scheme proposals - during which the company's share price took a hit after shareholders blocked a GBP72.5 million share bonus package for Ashley, the company's founder and biggest shareholder, the retailer said Ashley does not wish to be awarded any shares under the 2015 Bonus Share Scheme.
At the beginning of July the company's shareholders voted in favour of its 2015 Bonus Plan for executives, in a move that would have resulted in founder Ashley receiving his first remuneration since the company listed in 2007.
Sports Direct said Ashley has informed the board and remuneration committee that he does not expect any other share-based incentive scheme to be proposed to shareholders in relation to his role as an executive director of Sports Direct.
The new share scheme will grant those included in the plan no-cost options over 25 million shares, as long as certain earnings before interest, tax, depreciation and amortisation performance targets are met.
The new shares represent about 4.2% of the company and are worth GBP181.1 million in total at current prices.
"Mike's focus is on ensuring that the scheme aligns all employees to achieve the Company's objectives. Following recent unhelpful speculation surrounding his potential allocation, he is determined to ensure that there is the maximum number of shares available for the eligible employees," said Non-Executive Chairman Keith Hellawell.
Ashley holds 57.71% of Sports Direct shares, after selling a 4% interest in the company for GBP204 million in April. The company's shareholders have previously voted against paying Ashley any pay or bonus on three separate occasions; in early April they rejected a GBP72.5 million share bonus package.
In April the UK's biggest sporting goods retailer by revenue said it had the support of its biggest institutional shareholders, but not enough of the overall shareholder base to clear the proposal. Sports Direct in early June proposed including Ashley in the company's overall executive bonus plan for 2015.
While the scheme was approved July 2, just under 40% of shareholders still voted against the latest proposal at a company at the beginning of July after Sports Direct proposed a new bonus scheme for executives, based on performance targets.
Billionaire Ashley, who founded the company back 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 reported double digit growth in its gross profit and sales in the last nine weeks of its financial year to March 30, driven by strong retail growth both in its stores and online.
The company will Thursday report its full-year results for 2014.
By Alice Attwood; [email protected]; @AliceAtAlliance
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