Sports Direct shares move scrappedThursday 03 April 2014 18.23
Retailer Sports Direct has scrapped plans to pay founder Mike Ashley a shares windfall worth potentially more than £70m after shareholders failed to back the award.
Sports Direct cancelled a general meeting for Friday after a lack of shareholder support for the scheme, which would have handed Mr Ashley eight million shares if targets were met for this year and 2015.
The investor rebellion marks the second time in less than two years that Sports Direct has seen a bonus scheme for the Newcastle United owner rejected by shareholders.
Another previous attempt did not make it to a vote.
The group needed more than 50% of investors to approve the scheme at Friday's vote, but it is thought some large shareholders were worried the plans were not in line with corporate best practice as they did not include other company executives.
Mr Ashley - deputy executive chairman at the retailer - has not received a salary or bonus since the retailer floated in 2007. But he netted £929m in the flotation and has also since banked hundreds of millions of pounds by selling further shares in the business.
He still owns just under 62% of the group.
Sports Direct plans to put new proposals to investors at its annual general meeting in September that will see employees - including Mr Ashley - share out 25 million shares worth more than £220m if earnings targets for 2016 to 2019 are met.
Mr Ashley established Sports Direct on leaving school in 1982 and was the sole owner until the group's stock market listing in March 2007.
The group has around 400 UK stores and operations in 19 countries in Europe. It also owns brands including Dunlop, Karrimor and Slazenger.
Part of Sports Direct's recent success has been put down to the company's employee bonus scheme, which last summer rewarded around 2,000 staff with shares worth around £68,000.
The 2011 staff scheme is also on track to reward more than 3,000 staff having already surpassed two of the four earnings targets.
Mike Ashley was reported to be interested in making a bid for Elvery's Sports in Ireland, but the company's management team, led by Patrick Rowland, was this week approved by its examiner as the preferred investor.
He also owns a stake in Heaton's.