Sports Direct investors reject bonus scheme

http://www.guardian.co.uk/business/2012/sep/05/sports-direct-investors-bonus-scheme

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Shareholders in Sports Direct, Britain's biggest sporting goods retailer, have rejected a proposal that could have netted Mike Ashley, its billionaire founder, a bonus share award worth £26m.

The company had planned to ask investors at its annual general meeting on Wednesday to back the grant of eight million shares to Ashley, which would could only be sold in 2018 if performance criteria were met. Ashley owns 71% of Sports Direct and is executive deputy chairman. He does not take a salary and generates significant free advertising for the company through his ownership of Newcastle United.

Although the level of proxy votes in favour of the special resolution was more than 60% it did not reach the required 75%. Ashley was not allowed to vote his holding and the board decided to withdraw the resolution from the meeting.

"As a board, we are very disappointed that this resolution was not passed, however we respect shareholders' views," said Dave Singleton, chairman of Sports Direct's remuneration committee. He said a new scheme would be proposed to shareholders at a future meeting.

Earlier this year the so-called "shareholder spring" saw investors resist big pay rises at underperforming companies. The news on the Sports Direct proposal came on the same day the company posted some better news for investors: a 25% jump in first-quarter sales.