Sports Direct Founder, Newcastle United Owner Mike Ashley Walks Away From Bonus Scheme
Sportswear retailer Sports Direct Founder Mike Ashley has "pulled out of a contentious bonus scheme that gained the approval of Sports Direct shareholders just two weeks ago," according to Andy Sharman of the FINANCIAL TIMES. Ashley, who owns EPL side Newcastle United and "holds the unusual role of executive deputy chairman" at Sports Direct, said that he "did not wish to be awarded any shares" under the '15 incentive plan. The scheme, which was "voted through at a six-minute meeting two weeks ago," proposed to allow Ashley and "all eligible" employees to split £200M ($343M) of shares. Sports Direct Chair Keith Hellawell said in a statement ahead of "full-year results" on Thursday, "Following recent unhelpful speculation surrounding his potential allocation, he is determined to ensure that there is the maximum number of shares available for the eligible employees." Ashley "receives no salary from the group" and now does not expect "any other share-based incentive scheme to be proposed to shareholders in relation to his role as an executive director of Sports Direct" (FT, 7/16). In London, Graham Ruddick wrote in a piece originally published in January Sports Direct "may well be the craziest business on the high street." Not only is it run by Ashley, a "pantomime villain in Newcastle, but it has publicly fallen out with one of its two biggest suppliers, employs the vast majority of its workers on zero-hour contracts and has stores that resemble a jumble sale." And yet, "while Sports Direct may be unconventional, it is also hugely successful." Last year its shares rose 86% and its sales "were up" more than 20%. The "key to Sports Direct is its logistics." The ability of the company to "move stock around -- whether to stores or to a customer's home via online delivery -- quickly and efficiently." Ashley "is at the heart of it." In football circles he is "lampooned as a clueless Cockney who hired Joe Kinnear as Newcastle's director of football, renamed St James' Park and made Wonga the club's sponsor." But as a retailer, he "has few peers." His "genius was in the business model he created by buying up brands such as Dunlop, Lonsdale and Slazenger to sell alongside Nike and adidas" (TELEGRAPH, 7/16).