When Sports Direct’s controversial new share plan was approved by shareholders earlier this month, we were still left with the burning question of how much of the very large potential pay-out was going to be allocated to the Executive Deputy Chairman, Mike Ashley. Sports Direct have announced a very unexpected answer – he will not be participating after all! In addition to requesting that he not receive any allocation, Mike Ashley has gone further and requested that no further plans in which he would participate should be put forward to shareholders while the 2015 plan is in place (presumably in order to draw a line under this long-running saga).
The Guardian piece on this provides some very interesting background on the reasons for the announcement – particularly if you read it in conjunction with our earlier post, which explains the way that a recent change to the Listing Rules could affect the voting on the reappointment of non-executive directors at Sports Direct’s AGM in September.
So, Sports Direct is left with an equity incentive plan where the potentially very large pay-out and extraordinarily tough performance conditions were, apparently, tailored with Mike Ashley’s participation in mind. It appears that Sports Direct intends to press ahead with the new plan regardless but it has to be said that there now looks to be an uneasy fit between the plan design and the remaining intended participants. It remains to be seen what Sports Direct’s shareholders will think of that.
