Sports Direct is seeking shareholder approval for a supplemental bonus scheme that would give Mike Ashley £72m-worth of shares, depending on the company’s performance.
Sports Direct needs to achieve EBITDA of £330m for the current financial year to April 2014 and EBITDA of £410m for 2015 for Ashley to qualify for the bonus.
In 2013 the company’s EBITDA was £287.9m.
Providing the targets are met the nil-cost options would be realised in July 2018. The business has called a general meeting on April 4 to hold a vote on the matter.
This move to create a share incentive scheme in which Ashley could be included was first mooted in December 2011. He has received no remuneration since its initial public offering in February 2007, and he is not a participant of the existing executive bonus share scheme under which awards have been made to other executive directors.
Since September 2012, the company’s market capitalisation has increased from less than £2bn to approximately £5bn. The Sports Direct board said Ashley was “central to this value creation” and that shareholders “continue to benefit from his ongoing commitment”.
Sports Direct’s largest shareholder Odey Asset Management has already said that it intends to vote in favour of the resolution.
Chairman Keith Hellawell said Ashley was one of the “outstanding retailers of his generation”.
He added: “Following the success of the 2009 scheme, the 2011 scheme is on track to reward more than 3,000 employees having already surpassed two of the four EBITDA targets. Other senior executives also benefit from the executive bonus share scheme but this does not include Mike Ashley. He 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.”