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City applauds bigger bonusat Sports Direct

For once the City cheered a huge rise in a "fat cat" bonus yesterday as Mike Ashley, the founder of Sports Direct, was awarded an extra two million free shares in the retailer for beating earnings targets.

In February, Sports Direct said Mr Ashley would get six million shares, then worth £16.7m, for hitting its "Super-Stretch Scheme" targets in the year which ends this month.

Yesterday it raised that award to eight million shares worth £23.4m, but added more exacting targets for the coming three years.

The City took that as good news, with one analyst saying it "signals a high level of confidence" that with the Olympics and the European Championship this year and the Brazilian World Cup in 2014, Sports Direct can continue strong growth.

This is a vast contrast to when Sports Direct floated five years ago at 300p a share and Mr Ashley trousered £929m selling shares. Within five months the company had issued a profits warning and the share price had plummeted to less than 150p.

Shareholders – but not Mr Ashley, who holds 71 per cent – will be asked to approve the scheme.

Sales for the past nine weeks rose 13.2 per cent and gross profits increased by 13.5 per cent to £99.8m.