'Serious' concerns over Newcastle boss's firm

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The Independent Online

Embattled Newcastle United owner Mike Ashley was under pressure on a second front today after a shareholder action group attacked his company's pay plans.

Investors in Mr Ashley's stock market-listed retail group Sports Direct International are being urged to vote against pay proposals for executives at its annual shareholder meeting tomorrow.

The billionaire owner of Newcastle United is already suffering a furious backlash from club fans after last week's departure of manager Kevin Keegan.

Fans are reportedly pledging to boycott his Sports World stores and are also said to have told Mr Ashley not to attend away games.

Now investor advisory group Pirc has slammed Sports Direct's bonus plans in yet another blow to the group, which has had a troubled history in the City since flotation in February last year.

Pirc said the targets under its incentive pay scheme for top bosses were "not sufficiently challenging" and that departure bonuses in contracts were not appropriate.

The group also said it had "serious" corporate governance concerns over the senior line-up, with Mr Ashley also acting as deputy chairman with joint responsibility for strategy development.

"Pirc has concerns that there is a concentration of power in the hands of the executive deputy chairman, who controls the company and its strategic direction," said Pirc.

Mr Ashley, who owns 72.2 per cent of Sports Direct shares, is expected to face shareholders at the company's offices near Mansfield tomorrow.

Sports Direct, which owns Lillywhites and owns brands including Lonsdale and Slazenger, has been hammered over corporate governance issues since taking the firm public.

It has been criticised for its lack of communication with the City, failing to offer regular like-for-like sales figures, which strip out the effect of new store trade.

Its financial performance has also come under fire and the group reported in July that annual pre-tax profits more than halved to £85 million from £174.5 million the previous year.

The group pledged on reporting the figures that it would offer comparable store sales information on an annual basis.

But founder Mr Ashley has failed to win over the City's affections having at one time branding unhappy investors as "cry babies".

He netted a £929 million windfall on the group's stock market and has since bought back shares when the stock price fell dramatically.

Mr Ashley also bought Newcastle United last year - paying £133 million.

Sports Direct was not immediately available for comment.