James Moore: Dave's corporate tantrum as Sports Direct shareholders say 'no'
Outlook Parents the world over are accustomed to explosive reactions from their toddlers when they close the sweetie jars. It goes with the territory. The little darlings eventually just have to learn that no means no.
Of course, the longer you leave the jar open, the greater the blowback. Which is why so many executives are throwing expensive toys out of designer cots now that their companies' parents – the shareholders – are crying "enough", having sat on their hands for years over the issue of excessive remuneration.
Take Sports Direct. Yesterday its chief executive, Dave (sic) Forsey, threw a public corporate tantrum after his shareholders demanded that the company close a sweetie jar full of eight million free shares that it wanted to hand to its founder and executive deputy chairman, Mike Ashley.
"The board was extremely disappointed to withdraw the resolution regarding a proposed share-scheme award to Mike Ashley," said Dave. "The most disappointing aspect was where large shareholders gave their support only to then vote differently. This outcome is likely to lead to further uncertainty in the future."
That, in the corporate world, amounts to his sitting down in the middle of a Sports Direct store and screaming blue murder while other shoppers cast accusing stares in the direction of his mortified mum and dad.
To be fair, Dave and Mike's school report cards read well. Sports Direct is a tremendously successful business. Its shops are usually bursting with parents and children because they make usually ruinously expensive kit affordable.
The retailer also ensures that at least some staff share in its success. Around 3,000 – some on only modest salaries – are eligible for a bumper bonus scheme, although if Sports Direct wanted to be truly progressive it would extend this to its legions of part-time workers. They far outnumber the lucky few in the scheme.
Moreover, while the largesse to some employees might motivate them to perform, handing £64m (at current prices) in free shares to Mr Ashley is just silly. He has a 55 per cent stake in the business. What more motivation does he need?
Which brings us to Dave's ominous warning of "further instability in the future". Is his boss going to scream and scream until he's sick? Or just add to the 24 million shares he's already sold this year?
If that's Mike's response to not getting his way, Dave has just made it more difficult for him. A veiled threat like that isn't going to inspire much confidence in potential buyers.
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