Sports Direct cancels AGM after investors revolt over Ashley bonus

Plan to give group's founder £66m payout runs into trouble from shareholders

A shareholder revolt has forced Sports Direct to scrap a general meeting planned for Friday.

Problems centre on a controversial £66m bonus for the group's founder, Mike Ashley, who currently receives no salary or bonus from the retailer.

The company had proposed handing the "incentive" to its deputy chairman, Mr Ashley – the combative owner of Premier League Newcastle United – in the form of 8 million share options due to have paid out in 2018.

The general meeting was called last month to approve the executive bonus share scheme.

At the time it was reported that the largest institutional shareholder – the hedge fund manager Crispin Odey, who has a 7.3 per cent stake – had indicated that he would vote to approve the package. But late yesterday the company was embarrassingly forced to back down and cancel the meeting after admitting that the scheme would have been voted down by other shareholders.

Dave Singleton, the chairman of Sport Direct's remuneration committee, said: "During discussions with institutional shareholders, it became apparent that while we had the support of some of our largest shareholders, we had not been able to secure the requisite level of shareholder approval."

It is the second time a generous incentive for Mr Ashley has been vetoed by shareholders. In 2012 Sports Direct was forced to scrap a similar proposal.

But the fight to reward Mr Ashley – whose stake in the company he founded in 1982 is estimated at £3.2bn – is not over, Mr Singleton promised.

"We remain convinced of the benefit of aligning Mike Ashley's interests with those of all other shareholders," he said.

So the group will include Mr Ashley for the first time in its 2015 employee bonus share scheme which will be voted on by shareholders at its annual general meeting in September this year. The scheme will involve 25 million shares being handed out, around 4.2 per cent of its issued share capital. It is expected that Mr Ashley will be in line for a similar 8 million shares to that proposed in yesterday's scrapped scheme.

The new proposed bonus scheme will be conditional upon the company reaching profit targets of £480m in 2016, £570m in 2017, £650m in 2018 and £750m in 2019.

Ahead of the September shareholder vote, Sports Direct's chairman, Keith Hellawell, was yesterday talking up the benefits of the scheme to shareholders.

"Sports Direct's employee bonus share scheme is one of the most wide-reaching and successful employee reward schemes in the UK," he said. "The success of the scheme is demonstrated by the shareholder value created, with the share price reaching an all-time high this week and now almost seven times higher than when the 2009 employee bonus share scheme was approved by shareholders."

The group is due to release its full-year pre-close statement on 23 April.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there