In one of the most substantial recent examples of shareholder activism, Sports Direct has had to cancel today’s shareholders’ meeting that sought approval to its Supplemental Executive Bonus Share Scheme.  The most controversial aspect of the plan was the proposed award to the Executive Deputy Chairman, Mike Ashley.  If the performance conditions had been satisfied, Mike Ashley’s award (which he would have received in July 2018) would have been worth over £70m, based on today’s share price.  This isn’t the first time that Sports Direct has had difficulties putting an incentive plan in place for Mike Ashley.  In 2012 the company was unable to gain approval to grant Mr Ashley an award over 8m shares.

An interesting feature of Mr Ashley’s relationship with the company (besides the unusual nature of his title, Executive Deputy Chairman!) is that he doesn’t receive any salary, bonus or other executive remuneration.  Even so, certain shareholders (clearly sufficiently influential ones), were not in favour of the proposed award. 

Sports Direct, which is now a FTSE 100 company, has said it will return to shareholders in September, in conjunction with its AGM, to seek approval for a new Bonus Share Scheme which will include EBITDA targets for the years from 2016 to 2019.  The company has made it clear that Mr Ashley is intended to be an award holder.  Whether it can convince shareholders that the quantum of that award is justifiable would appear to be the challenge facing the chairman of its remuneration committee.