Sports Direct shareholders have finally squeezed through plans to pay the sports chain's billionaire founder Mike Ashley a multi-million pound bonus at the fourth attempt.
The vote passed with just 60% in favour at a special meeting called at the company’s remote Shirebrook, Derbyshire offices, attended by fewer than five shareholders.
It will see Ashley share a £200 million cash pot with an as-yet-unknown number of employees if certain profit targets are hit over the next several years.
Following the five-minute meeting, Ashley boarded his helicopter and refused to comment to the waiting press. Although, chairman Keith Hellawell, thanked shareholders for recognising the “substantial contribution made by Mike Ashley over many years”.
The payout comes despite unprecedented criticism over the award from several institutional investor advisory bodies and an attack last night by the Institute of Directors.
Sports Direct has spent the past three years attempting to persuade shareholders to pay Ashley a bonus, with three votes and one promise of a vote that never materialised, all of which were rejected.
What made today’s bonus offer different was that Ashley would be included in a small pool of employees from the board to the shop floor who are entitled to huge bonuses, instead of a one-off payment to Ashley as previously proposed.
If shareholders had voted against today’s resolution the employee bonus scheme would have ended.
Hellawell said keeping the scheme “will ensure that the Group continues to retain and motivate its hard-working employees” despite criticism over the company’s decision to employ over 90% of its staff on controversial zero-hours contracts.
It is still not known what percentage of the £200 million pot Ashley will receive and whether this will dilute the amount of shares handed out to store managers and full-time staff.
The unanswered questions led to a rare attack by the IoD, who said: which represents directors across much of the stock market, who said corporate governance at the retailer was questionable.
Dr Roger Barker, director of corporate governance at the Institute of Directors, warned: “This type of pay package would be unthinkable for a senior executive who was not also the company’s major shareholder.”