Who are these spineless Sports Direct shareholders who now support the idea of offering founder Mike Ashley a mega bonus? And why have they changed their minds since April, when they booted out the company's last attempt?
According to Sports Direct, there are three reasons why it was able today to secure a 60:40 majority among non-Ashley shareholders. It extended the length of the performance period from two to four years; the targets were made harder; and Ashley's incentives were wrapped up within a £200m scheme that will cover all 3,000 or so permanent staff.
But the last of these explanations is a nonsense because Sports Direct refuses to say how much of that £200m has been earmarked for Ashley. Last time around, under the tailor-made plan, he was being offered about £70m, which was deemed far too rich for a public company. The precedent would have been appalling.
But the 60% of shareholders voting for the latest plan may now have sanctioned £70m anyway. Shareholders have no way of knowing what Ashley's award will be. If it is £70m, they will have allowed Sports Direct to smuggle in via the back door an award that was kiboshed when the company knocked on the front door. Or perhaps the figure will be £100m on the grounds that the performance hurdles are now higher.
The Institute of Directors – not a hotbed of Marxist radicalism – called this one correctly. Its director of corporate governance, Roger Barker, said on Tuesday: "This type of package would be unthinkable for a senior executive who was not also the company's major shareholder. It raises doubts about whether the board is acting as an effective independent check on Ashley's power."
Quite right. Ashley has a 58% stake worth about £2.5bn and thus does not lack motivation to put in a decent shift as an executive deputy chairman. Sports Direct's chairman, Keith Hellawell, looks a patsy in his arrogant refusal to set out the terms of Ashley's award.
The 60% of compliant shareholders have sent two bad messages: first, that the normal standards of corporate governance and disclosure don't matter when the share price generally goes up; second, that they'll roll over when a big founding shareholder is sufficiently bloody-minded.
