July 1, 2014 / 5:05 PM / 4 years ago

UPDATE 1-UK business group joins opposition to Sports Direct bonus proposal

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LONDON, July 1 (Reuters) - British business lobby group the Institute of Directors (IoD) has joined opposition to the latest bonus scheme proposed by Sports Direct, saying on Tuesday it has “significant concerns” about the retailer’s corporate governance.

The proposed scheme from Britain’s biggest sporting goods retailer could potentially award shares worth 200 million pounds ($340 million) to Mike Ashley - the firm’s founder, deputy executive chairman, and 58 percent shareholder - as well as to an undisclosed number of employees.

Sports Direct investors are due to vote on the proposal at a meeting on Wednesday.

“Sports Direct is seeking to push through excessively generous pay arrangements for Mr Ashley. The IoD is concerned that this is suggestive of weak underlying governance at the company,” it said in a statement.

The IoD said the proposal would be unthinkable for a senior executive who was not also the company’s major shareholder.

“It raises doubts about whether the board is acting as an effective independent check on Ashley’s power,” it said.

Sports Direct declined to comment.

The Association of British Insurers (ABI) and the Local Authority Pension Fund Forum (LAPFF) have already called on investors to oppose the proposed scheme.

The proposal is Sports Direct’s fourth attempt at rewarding Ashley, who receives no salary or other bonus from the retailer.

Ashley founded Sports Direct in 1982 and also owns soccer club Newcastle United. (Reporting by James Davey; editing by Sarah Young and Pravin Char)

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