(Adds comment from source)
By Simon Jessop and Esha Vaish
LONDON, June 30 A group of UK public sector
pensions recommended on Monday that its member funds oppose
Sports Direct's planned 2015 bonus share scheme, citing
concerns over the sports retailer's remuneration of its chief
The Local Authority Pension Fund Forum (LAPFF), a voluntary
association of 60 public sector pension funds with combined
assets of around 120 billion pounds ($204.19 billion), said the
plan was "inappropriate."
"LAPFF believes that it is inappropriate to establish an
incentive plan with a single board member in mind, especially
one whose company has a 57.7 percent holding in Sports Direct,"
Forum Chair Councillor Kieran Quinn said in a statement.
Quinn said the bonus plan "creates a bias in favour of Mr
Ashley as well as the impression that he is creating the scheme
for himself," and that he should be rewarded through dividends
on his shares in the company.
"It would also 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," he said.
Sports Direct will canvas shareholder opinion on the scheme
at a meeting on Wednesday, marking the fourth attempt to agree a
payout to founder Mike Ashley, who receives no salary or other
bonus from Sports Direct.
"We are concerned that people are missing the point. These
shares would not fully vest for seven years and depend on a very
strong performance for the next five years," a source close to
Sports Direct told Reuters.
"This scheme means it can retain and reward staff."
Ashley, who founded the company in 1982, owns around 58
percent of the company.
($1 = 0.5877 British Pounds)
(Reporting by Simon Jessop in London, Karen Rebelo and Esha
Vaish in Bangalore; Editing by Laura Noonan and Bernadette Baum)