Sports Direct founder Mike Ashley has withdrawn from the company's latest bonus scheme despite recent efforts to encourage shareholders to approve the deal.
Mr Ashley, who is also the owner of Newcastle United, surprised members of the sportswear retailer with the decision and stated that he would not be approaching shareholders about his remuneration until 2019. The founder maintains a majority stake in the company but does not take a wage and the company refused to say how much Mr Ashley would be allocated following this agreement.
Prior to Mr Ashley's announcements shareholders had voted in favour of a bonus scheme despite it being initially rejected and it facing major opposition from some investors. The vote, earlier in the month, showed a 60.4 per cent swing in favour of scheme, representing the third time the company had tried to push it through since 2012.
The bonus scheme had drawn criticism from the Institute of Directors (IoD), which stated ahead of the original vote that it had "significant concerns" about the corporate governance within Sports Direct. However, Keith Hellawell, non-executive chairman of Sports Direct, said that Mr Ashley was "determined to ensure that there is the maximum number of shares available for the eligible employees."
Speaking to the Guardian, retail analyst Nick Bubb added: "Maybe Mike realised that he would end up getting too much of the share scheme and would thus squeeze out the staff, which would be counter-productive.
"Plenty of people thought Mike Ashley shouldn't need any more motivation, given his huge shareholding in the company, so presumably that is what will keep him going from now on."
Mr Ashley has also come in for criticism in his other venture at Newcastle United with supporter regularly stating a lack of investment is preventing the team from progressing and that better players are sold at a high profit only to be replaced with cheaper alternatives.
Find up to date information on the FTSE 100 and spread betting strategies at City Index.