Sports Direct is seeking approval from its shareholders for the implementation of its 2015 bonus share scheme.
The terms of the bonus scheme provide for the grant of up to 25 million shares in the organisation to eligible employees, including executive directors.
The vesting of these shares would be conditional of certain performance targets, including: full year results of £480 million in 2016, full year results of £570 million in 2017, full year results of £650 million in 2018 and full year results of £750 million in 2019.
If these performance targets are all met, 25% of any award would vest following the announcement of the organisation’s audited full year results in July 2019, and 75% of the award would vest following the announcement of the organisation’s audited full year results in July 2021.
Sports Direct has posted a circular to its shareholders to convene a general meeting for the purposes of seeking approval for the implementation of its 2015 bonus scheme.
In December 2011, the board stated its intention to seek shareholder approval for a share incentive scheme in which Mike Ashley, the organisation’s executive deputy chairman, would be eligible to participate.
In March 2014, the board re-iterated this intention and a circular was posted to shareholders convening a general meeting in April 2014 for the purposes of seeking approval for the implementation of a supplemental executive bonus scheme.
Despite securing support from some of its largest shareholders, Sports Direct announced in April 2014 its decision to withdraw the resolution to be voted on by shareholders on 4 April 2014 and its intention to seek shareholder approval for a 2015 bonus scheme, which would include a longer timeframe and more stretching performance targets.
Given their current eligibility to participate, the executive directors, including Ashley, have informed the board that they will not exercise their shareholder rights to vote on the resolution to approve the 2015 bonus scheme.
Keith Hellawell, chairman of Sports Direct, said: “Sports Direct’s employee bonus share scheme is one of the most wide-reaching and successful employee reward schemes in the UK.
“The success of the scheme is demonstrated by the shareholder value created, with the share price reaching an all-time high in April  and currently six times higher than when shareholders approved the 2009 employee bonus scheme.
“The board and the remuneration committee have responded to the feedback received from shareholders to develop a long-term share incentive scheme, which not only will continue to motivate the organisation’s employees, but which also recognises and rewards the substantial contribution made by Mike Ashley over many years.
“Based on the stretching performance targets established, this scheme has the potential to create a further substantial increase in shareholder value.”