(Adds reaction from analysts, details on previous bonus
LONDON, June 9 Britain's Sports Direct
has convened a shareholder meeting to try to win backing for a
new bonus scheme that would pay out to Mike Ashley, in its
fourth attempt at rewarding the company's founder.
Britain's biggest sporting goods retailer had to scrap plans
in April for a vote on a share bonus scheme worth 73 million
pounds ($122.57 million) for Ashley after failing to win enough
Ashley, who also owns soccer club Newcastle United, founded
the firm in 1982. It has grown rapidly during the economic
downturn on demand for its value offers and now has more than
600 sports stores in Europe, including 400 in Britain.
Despite the success, Executive Deputy Chairman Ashley
receives no salary or other bonus from Sports Direct.
Previous attempts to pay out to Ashley have been quashed by
shareholders who thought the company's targets were too limited
On Monday the company set out a new plan, with a 2015
company-wide scheme dependent on what it said were more
stretching earnings targets over a longer timeframe. Under the
proposal, earnings would need to more than double by the end of
the period in 2019.
Numis analyst Andrew Wade said the targets represented an
"exceptional medium term growth trajectory", although he noted
that with no reference in the targets to net debt ratios, much
of the growth could be driven by acquisitions.
"We retain our positive stance on Sports Direct, seeing
significant scope for the group to build on its leading position
in the UK and expand aggressively into Europe," he said.
Chairman Keith Hellawell said the board and remuneration
committee had responded to the feedback from shareholders.
"(This is) 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," he said.
The failed bonus scheme in April was the third attempt by
Sports Direct's board to reward its founder in recent years. One
previous proposal was knocked back by shareholders due to
concerns that the targets it set were too easy to achieve, and
another failed to be put to a vote.
Days after the April vote failure, shares in Sports Direct
fell after Ashley cut his stake. He now owns around 58 percent.
Under the new plan, the scheme would grant up to 25 million
ordinary shares in the company to eligible employees, including
executive directors, amounting to around 4.2 percent of the
issued share capital of the company.
The earnings targets run from 2016 to 2019. If the targets
are met, 25 percent of any award would vest following the
announcement of company results in July 2019, and the rest would
vest in 2021.
($1 = 0.5956 British Pounds)
(Reporting by Kate Holton, Editing by Paul Sandle and Louise