Sports Direct proposes £65m share bonus for founder AshleyTuesday 11 March 2014 09.27
Sports Direct has today outlined plans to hand its founder and deputy chairman Mike Ashley a share bonus worth around £65m in recognition of the company's rise to Britain's biggest sporting goods retailer.
Ashley, who holds a 62% stake in the company he founded in 1982, receives no salary or bonus from Sports Direct despite being the key figure in the company's success.
The firm said it would put proposals to shareholders at a meeting on April 4 to grant Ashley 8 million ordinary shares, worth almost £65m at yesterday's closing share price of 809 pence.
"The company has already received support from its largest institutional shareholder, Odey Asset Management, who has confirmed that it intends to vote in favour of the resolution," Sports Direct Chairman Keith Hellawell said.
"The board believes that Mike is one of the outstanding retailers of his generation and that all shareholders benefit from his on-going commitment to Sports Direct."
Sports Direct owns a 50% stake in Heatons, the Irish department store chain. Heatons wants to buy the Irish sports chain Elverys, which is currently owned by the Mayo-based Staunton family and is being sold through a receiver, David Carson of Deloitte.
The share award is dependent upon the firm achieving full-year core earnings of £330m in 2014 and £410m in 2015, as well as a net debt/EBITDA ratio of 1.5 times or less at the end of its 2015 fiscal year.
The proposal is the third attempt by Sports Direct's board to reward its founder. One previous proposal was knocked back by shareholders due to concerns over the related performance targets, and another failed to be put to a vote.
The group, which has over 600 sports stores in Europe, including 400 in the UK, grew rapidly during the economic downturn on demand for its value offers, supported by a mixture of acquisitions, expanding online sales and the demise of rivals like JJB Sports.
The firm's shares, up 88% on a year ago, entered London's blue-chip FTSE 100 index in September.