A controversial bonus scheme for Sports Direct founder Mike Ashley has got the green light, despite a large protest vote from shareholders.
The plan, which has the potential to grant 25 million shares worth around £180 million to 3,000 employees including Mr Ashley, came under fire from investor lobby groups as well as the Institute of Directors.
J ust over 60% of the shareholders eligible to vote backed the plan, ending a two-year bid by the company to secure a scheme for its deputy chairman.
In April, the company pulled a proposal that could have awarded Mr Ashley more than £70 million based on targets for this year and 2015. The business initially tried to hand Mr Ashley a bonus in September 2012, but again failed to win enough investor support.
Mr Ashley, who is owner of Newcastle Football Club, has not received a salary or bonus since the retailer floated in 2007, although he netted £929 million in the flotation and has since banked h undreds of millions of pounds selling shares in the business. He owns 58% but was not able to vote today.
Shareholder lobby groups criticised the latest proposals, particularly as the allocation of shares to Mr Ashley has not been disclosed.
The Local Authority Pension Fund Forum said that it was inappropriate to establish an incentive plan with a single board member in mind.
Forum chairman Kieran Quinn said: "This arrangement creates a bias in favour of Mr Ashley as well as the impression that he is creating the scheme for himself.
"The company states that it has performed very well over the year, so Mr Ashley should be adequately compensated through dividends on his shares in the company."
He added that it would be preferable to establish a salary for Mr Ashley on which his contribution to a bonus pool could be based, rather than creating an arrangement for him that is different from that of the other board members.
To achieve the payout the firm's earnings will have to hit £480 million at the end of the 2016 financial year and rise to £750 million by 2019. Last year the business posted annual underlying earnings of £287.9 million.
Part of Sports Direct's recent success has been put down to the company's employee bonus scheme, which last summer rewarded some 2,000 staff with shares worth around £68,000.
The 2011 staff scheme is also on track to reward more than 3,000 staff having already surpassed two of the four earnings targets.
Sports Direct has around 400 UK stores and operations in 19 countries in Europe. It also owns brands including Dunlop, Karrimor and Slazenger.
Mr Ashley's allocation of the bonus scheme will be decided by the firm's remuneration committee.
Sports Direct chairman Keith Hellawell said the company's employee bonus share scheme was one of the most successful employee reward schemes in the UK.
He added: "The success of the scheme is demonstrated by the substantial shareholder value created over the last five years.
Mr Hellawell said the vote will ensure that the group continues to "retain and motivate its hard-working employees".
He added: "The resolution today also recognises the substantial contribution made by Mike Ashley over many years and, as demonstrated by the previous schemes, has the potential to create a further significant increase in shareholder value."