NEWCASTLE United owner Mike Ashley has received the green light to go ahead with a controversial bonus scheme at sportswear giant Sports Direct.
Mr Ashley, the firm’s founder overcame a large protest vote from shareholders yesterday.
The plan, which has the potential to grant 25 million shares worth about £180m to 3,000 employees including Mr Ashley, came under fire from investor lobby groups as well as the Institute of Directors.
Just over 60 per cent of the shareholders eligible to vote backed the plan, ending a two-year bid by the company to secure a scheme.
Mr Ashley has not received a salary or bonus since the retailer floated in 2007, although he netted £929m in the flotation and has since banked hundreds of millions of pounds selling shares in the business. He still owns 58 per cent but was not able to vote yesterday.
Shareholder lobby groups criticised the latest proposals, particularly as the allocation of shares to Mr Ashley has not been disclosed.
The Local Authority Pension Fund Forum said that it was inappropriate to establish an incentive plan with a single board member in mind.
Forum chairman Kieran Quinn said it would be preferable to establish a salary for Mr Ashley on which his contribution to a bonus pool could be based, rather than creating an arrangement for him that is different from that of the other board members.
To achieve the payout, the firm’s earnings will have to hit £480m at the end of the 2016 financial year and rise to £750m by 2019.
Part of Sports Direct’s recent success has been put down to the company’s employee bonus scheme, which last summer rewarded some 2,000 staff with shares worth about £68,000.
Mr Ashley’s allocation of the bonus scheme will be decided by the firm’s remuneration committee.
Sports Direct chairman Keith Hellawell said the company’s employee bonus share scheme was one of the most successful employee reward schemes in the UK.
He added: “The success of the scheme is demonstrated by the substantial shareholder value created over the last five years.