Sports Direct chides shareholders for rejecting founder's bonus scheme

Sports Direct has openly castigated its shareholders for not backing the supplemental executive bonus share scheme, which would have granted its founder Mike Ashley roughly 73 million pounds worth of shares. Last month UK's largest sporting goods retailer called for a shareholders

meeting to discuss the implementation of the bonus scheme to reward Ashley, who has not received any bonuses nor a salary from the company since its initial public offering in February 2007.

However, earlier this month, the company canceled its meeting when the bonus scheme failed to receive sufficient support from investors.

Sports Directs criticize shareholders for not supporting bonus scheme for founder

“The final outcome is particularly disappointing given that a clear majority (over 60 percent) voted in favor of the original scheme proposed in September 2012 and we narrowly missed the required support for the Supplemental Executive Bonus Share Scheme,” commented Dave Singleton, non-executive director and chairman of the remuneration committee.

On Wednesday during its trading update, Dave Forsey, chief executive of Sports Direct International added that although total sales have risen 10.3 percent to 360 million pounds in the nine weeks to 30 March, “during the period, the Board was extremely disappointed to withdraw the resolution regarding a proposed share scheme award to Mike Ashley.”

“The most disappointing aspect was where large shareholders gave their support only to then vote differently. This outcome is likely to lead to further uncertainty in the future."

Since the shareholders rejection of the bonus scheme, Ashley has surprised analysts and investors by selling a 223 million pound stake in Sports Direct, cutting his stake in the company by 4 percent to 57.7 percent. In the meantime, he also managed to obtain an 11 percent stake in House of Fraser prior to the department store's sale to Chinese conglomerate Sanpower Group.

Despite shareholder and external disputes, the company remains “very confident” that it will achieve its full year internal underlying EBITDA target of 310 million pounds, before staff bonus charges.

Photo: Sports Direct founder Mike Ashley.