Sports Direct is facing opposition to a bonus scheme which could see the retailer's founder Mike Ashley and the firm's employees being awarded a multi-million pound share bonus.
The FTSE 100 firm has asked shareholders to vote for its 2015 Bonus Share Scheme, which would give its members 25 million ordinary free shares – worth £180m ($308m, €225m) at their current price – if the firm doubled its earnings to £750m by 2019, when these shares will be vested.
The company explained to investors that all eligible employees, including executive directors and Ashley, will be able to benefit from the scheme as long as they meet its qualifying conditions and performance criteria.
"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 Company's employees but which also recognises and rewards the substantial contribution made by Ashley over many years," said Keith Hellawell, chairman of Sports Direct.
But it is not clear how many shares Ashley will be given as part of the scheme since the company will allocate the shares if and after the scheme is approved by shareholders, a source close to company told IBTimes UK.
However, the Local Authority Pension Fund Forum, a group of 60 local authority pension funds with combined assets of more than £125bn, said it has urged its members to oppose the move – citing Ashley's 57.7% stake in Sports Direct.
"LAPFF believes that it is inappropriate to establish an incentive plan with a single board member in mind, especially one whose company has a 57.7% holding in Sports Direct," Kieran Quinn, chair of the LAPFF.
The comments come ahead of a vote on the incentive scheme at Sport Direct's general meeting on 2 July 2014.