Chris Blackhurst: Mike Ashley is not to the City’s tastes but those who scorn him would do better to follow his example

Midweek View: My respect for Mr Ashley is not just that he stopped my table-tennis-loving nine-year-old having a tantrum

When the hot weather came, it was time to wheel out the table-tennis table in the garden. The problem was: no bats and balls. Somehow the bats had gone missing since last summer, and as for the balls, they were somewhere in the bushes. When I came to scour the local shops, only one had what I wanted: Sports Direct. I’ve got numerous smarter stores full of super-cool sports brands where I live. But did they have ping-pong bats and balls? No chance.

Up on the top floor of Mike Ashley’s pile ’em high emporium, far beyond the T-shirts, shell-suits, fleeces and trainers, there was a table-tennis section. What’s more, the bats and balls were heavily discounted.

It’s fashionable to curse Mr Ashley. It’s been that way among London’s smarter crowd ever since he bought Lillywhites in Piccadilly, and turned it from much-loved sports department store to little more than yet another outpost, albeit a large one, of his cheap-as-chips empire. Within football, purists despair of his treatment of Newcastle United. While other clubs with similar pedigrees spend fortunes to remain successful, Mr Ashley has adopted a tough, pragmatic, business approach to running a football club.

In the City, he’s viewed as a maverick – as someone who likes to ride roughshod over etiquette and niceties, who plays a much rougher, singular game than the other fancy-pants members of the FTSE 100.

When he floated Sports Direct in 2007, it was at 300p a share. That did look a bit toppy, to be fair, and the shares crashed. The City moaned like mad. Mr Ashley’s response was to jeer: it wasn’t his fault that they bought the shares. If they then chose to sell, that was their look-out; their short-termism was their loss. So it has proved. Sports Direct shares today stand at 660p, a massive reward for anyone who refused to panic and stuck by Mr Ashley.

Last month, he upset the institutions again by proposing to push through a bonus scheme that would have given the retailer’s billionaire founder a mega-payout, in 2021. Despite winning shareholder approval, Mr Ashley bowed to the pressure and withdrew the scheme.

Only Simon English, the City editor of The Sun, has declared affection for Mr Ashley. I want to band together with Mr English and form the Mike Ashley Supporters’ Club.

My respect is not just based on the fact he stopped my table-tennis-loving nine- year-old having a tantrum and kitted us out with bats. It’s because, yesterday, Sports Direct issued its annual report – a document that should be required reading in every FTSE 100 and City boardroom, every office where directors’ remuneration and motivation are discussed.

The Sports Direct remuneration report runs to eight pages, whereas others run to over three times that length. That alone tells you something.

Last year, Dave Forsey, Sports Direct’s chief executive, earned £150,000. That’s it. He received no bonus payment, no pension top-up, no ex gratia award. In fact, he hasn’t had a pay rise since 2002. This, for running a business that turned in a surplus of £331m. Mr Forsey was set a target of £260m, and he exceeded it by £71m. He still got zilch.

The year before, he was asked to produce £250m, and he hit £288m. What did he get? Nothing. This year, the board has told him to aim for £300m, and the consensus among the analysts is predicting £380m.

That isn’t quite the whole story. Mr Forsey makes the bulk of his money from a long-term share scheme. Every four years, if bonus share performance targets are met, he can sell 1 million shares, so in 2010-2011, he netted £6.5m, on top of his £150k salary. He is allowed to make a maximum average over the four years of £1.9m a year. This means that 92 per cent of his pay over the four years is based entirely on share price performance.

But by actually receiving £150,000 last year, Mr Forsey was the worst-paid CEO in the FTSE 100 – by some considerable distance. His pay was seven and a half times the average wage of a Sports Direct employee. To put that in context, at goody-two-shoes John Lewis, the boss, Sir Charlie Mayfield, is paid approximately 60 times the average John Lewis worker, and under the mutual’s constitution, that figure could go up to no more than 75 times.

Let’s apply some further context to Mr Forsey’s pay. Sports Direct has a market capitalisation of around £4bn. Its shares have risen sixfold since its employee share scheme was first put in place in 2009. Also on that £4bn level is Morrisons. While Sports Direct shares have been rising, Morrisons’ shares have been falling. What did Dalton Philips, Morrisons’ CEO, earn last year? £850,000 plus benefits, which made the total package some £1.1m.

Another retailer, Marks & Spencer, has a market cap of £6.9bn. Its chief, Marc Bolland, was paid a total of £1.6m last year. So the boss of a company worth £4bn picks up £150,000 and one worth £6.9bn collects £1.6m …

Since Mr Ashley told his senior staff that if they wanted to make some serious dosh they needed to drive the shares, as I said, the shares have risen more than sixfold. They have out-performed the FTSE 100 over the same period, since 2009, by 661 per cent, and the retail sector by 637 per cent.

Those who turn up their noses at Mr Ashley should study these figures. Those same fund managers who would not dream of entertaining him to lunch in one of their swish dining rooms complete with silver service and the finest wines (all paid for by the hapless client) ought to take note. He may not be able to teach them manners and the correct way to eat peas off a fork, but he can sure as hell give them a lesson in acceptable remuneration levels and how to incentivise staff.

All hail Mike Ashley: supplier of table-tennis bats; waver of a finger at a smug, overpaid City; the man the rest should follow.

HSBC treated customers badly and is paying the price

 One of the most notable aspects of the banking crisis was the reluctance of the top bankers to put their heads above the parapet and to defend their industry. It was always left to the British Bankers’ Association to do the talking.

Now Douglas Flint, HSBC’s chairman, has decided to say something – and he would have been better advised to keep his mouth firmly shut. He has decided to have a whinge about the regulatory workload heaped on a bank like HSBC. It’s so onerous that it’s affecting the bank’s ability to take risks.

Bless. His is an organisation that made profits of £7.3bn in the first six months of the year.

As for the regulatory overload, it wasn’t provoked by some zealous anti-banking crusade, but rather by the actions of HSBC itself. The mis-selling of payment protection insurance, breaches of the Consumer Credit Act, money laundering and sanctions-busting, alleged rigging of gold and silver markets – these weren’t activities dreamt up by crazy watchdogs. What is more, we have a right to expect HSBC to obey stringent rules when it is taxpayers who stand to foot the bill when a “too big to fail” institution such as Mr Flint’s hits trouble. It is true that HSBC did not have to be directly rescued by the taxpayer, but it was the beneficiary of huge quantities of emergency “liquidity” loans from the world’s central banks – effectively a taxpayer subsidy to their business.

The fact that HSBC now employs 6,000 compliance officers is not down to the authorities. It’s a reflection of a big bank that treated its customers with contempt and is today paying the price for that disregard.

What’s alarming is that Flint simply does not get it. I suspect he is not alone. Only when a banker is jailed will they finally understand. Although even then, I fear they will claim it is someone else’s fault.

Start your day with The Independent, sign up for daily news emails
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum