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Sports Direct’s Mike Ashley might finally get paid
The retailer’s founder hasn’t had any remuneration since it floated in 2007. Now its board hopes shareholders will approve his new package.
It’s not often we pity billionaires – but you’ve got to feel for Sports Direct founder Mike Ashley, who hasn’t had a brass farthing since 2007 when the retailer floated.
It’s not like its board hasn’t tried. Twice, actually: In 2011, and then again in March this year, it called shareholder meetings so they could approve remuneration policies for Ashley. But the shareholders said no.
Now, Sports Direct’s board reckons it’s finally come up with a way to get some cash into Ashley’s bank account: If investors didn’t like the previous, ‘Mike-only’ plans, why not lump him in with the rest of the employee reward scheme?
And lo, in a statement posted to the stock exchange this morning, the board said under new plans, all its employees – including directors (read: Ashley) – will be eligible for a slice of a pie made up of 25 million shares. Provided, that is, they manage to more than double the retailer’s earnings to R13.5 billion by 2019. And provided they’re still working at the company in 2019, when the first 25 percent of the share scheme vests, and then 2021 when they get the rest.
It’s a sensible way of doing it: By grouping directors in with employees, it means that denying Ashley a reward would be to deny Steve, floor manager of Sports Direct Penge, a reward – which seems callous. But the criteria are tough enough so that if Ashley fails to steer the retailer in the right direction, he’ll lose out.
Although the company is on track to report earnings of R5.5 billion for this year, since its peak in April (when Ashley, Sports Direct’s largest shareholder, took the opportunity to offload R3.6 billion of his own shares), Sports Direct’s share price has fallen by 11 perecnt.
So clearly shareholders’ faith in Ashley isn’t what it was. They vote on 2 July. Fingers crossed – more for Steve’s sake than Ashley’s.