Sports Direct is attempting for a third time to get shareholders to approve a multi-million-pound bonus for the retailer's billionaire founder, Mike Ashley.
The board is proposing that Mr Ashley, who pocketed £1bn when he floated the business in 2007 and is now worth an estimated £3.3bn, should be given 8 million shares worth nearly £67m at yesterday's share price, if certain targets are hit between now and July 2018.
Shareholders have been invited to Sports Direct's Derbyshire headquarters on 4 April to approve the pay packet, as Mr Ashley has yet to receive a salary for his role at the company as executive deputy chairman.
A vote to give Mr Ashley a similar reward in 2012 was pulled from the agenda at the company's annual general meeting when it became clear that the board would not get the required votes from shareholders. Last year's meeting also had no vote on the topic even though directors had previously said they were keen to pursue a resolution after the failure in 2012.
Mr Ashley will not use the voting rights that his own 62 per cent stake brings him, relying on other investors to approve a deal under which profits, before tax and one-off items, must hit £330m this year and £410m next. Debt levels must also stay stable.
Keith Hellawell, Sports Direct's chairman, said: "Mike Ashley, our executive deputy chairman … receives no remuneration for his substantial contribution to the success of the company, including the £3bn of shareholder value that has been created since a scheme was originally discussed with shareholders.
"The board believes Mike is one of the outstanding retailers of his generation and all shareholders benefit from his ongoing commitment."
The proposal has received early backing from Sport Direct's largest institutional shareholder, Odey Asset Management.
The company already has a bonus scheme for its full-time employees – around 10 per cent of the total workforce – but it has also been criticised by unions and politicians for using zero-hour contracts for its remaining staff.
The company does not pay a dividend.
At the height of the "shareholder spring" in 2012, the Association of British Insurers issued a red-top alert over the bonus proposals at the company because of concerns that they did not include other Sports Direct executives and only stipulated one measure of performance.
The shareholder advisory group Pirc also recommended against voting for the resolution, and once proxy votes had been taken into consideration it was clear that the vote would not pass.
At the time, Dave Singleton, a non-executive director and the chairman of the remuneration committee, said: "We are very disappointed that this resolution was not passed. However, we respect our shareholders' views."
Later that year, the company said it was still looking at alternative ways of compensating Mr Ashley and there had been suggestions that a proposal would be put forward at last year's AGM.
Again, however, a resolution was not tabled as the company appeared unable to get full support from shareholders.Reuse content