LONDON, June 30 (Reuters) - A group of UK public sector pensions on Monday recommended its member funds oppose Sports Direct’s planned 2015 bonus share scheme, citing concerns over the sports retailer’s remuneration of its CEO.
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”.
The company 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.
“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 Cllr 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.
Ashley, who founded the company in 1982, owns around 58 percent of the company. Sports Direct was not immediately available for comment when contacted by Reuters. ($1 = 0.5877 British Pounds) (Reporting by Simon Jessop in London, Karen Rebelo and Esha Vaish in Bangalore)