Sports Direct owner Mike Ashley has become embroiled in a fresh dispute over a bonus scheme that could award him millions of company shares.
The Association of British Insurers (ABI), one of the largest shareholders with a 20% stake, has called for a shareholder vote next Wednesday (July 2) to strike down the proposed scheme, through which Ashley and an undisclosed number of employees could net up to £200m-worth of shares.
On June 19, ABI issued a “red-top” alert pointing to serious concerns about the scheme, which had been announced 10 days earlier.
An ABI spokesman said: “We don’t issue a red top lightly. It shows we have serious misgivings about something, in this case an issue of remuneration or governance. We feel there is an overall lack of accountability.”
A number of other key shareholders with a combined 18% stake in the company are expected to support ABI in the vote. ABI said the red-top alert was not intended as an instruction on how to vote, but “sent a signal to bear in mind”.
Ashley, who is executive deputy chairman and holds a 58% stake in Sports Direct, will not be eligible to vote.
If the plan falls through, it will be the fourth time a share allocation bonus for Ashley and other Sports Direct employees has been attempted and failed to go through since September 2012.
In April, the company was blocked from awarding its billionaire founder a direct bonus of £73m.
The majority of Sports Direct’s employees are employed on zero-hours contracts and are not eligible for the bonuses.
In a statement, Sports Direct chairman Keith Hellawell said: “The board and the remuneration committee have responded to feedback received from shareholders to develop a long-term share incentive scheme, which not only will continue to motivate the company’s employees but which also recognises and rewards the substantial contribution made by Mike Ashley over many years.”
It comes as Sports Direct gears up to boost its presence in Australia and Asia, after it acquired a 4.8% stake in etailer MySale.co.uk on June 18.