Sports Direct has hit back at claims over its chief executive’s pay, calling reports on his remuneration in a London newspaper “fake news”.
In statement the retail group said that calculations published in City AM, a free newspaper aimed at workers in The City, and attributed to Pensions & Investment Research Consultants, were incorrect. They suggested that Sports Direct had the second-highest ratio of CEO-to-employee pay in the FTSE 350.
The data appeared in a table and was published by City AM on Monday. In an updated version of the article online, City AM mentioned Sports Direct’s rebuttal and said it was waiting for a response from Pirc. A spokesperson for the newspaper said: “It’s one thing for Sports Direct to dispute Pirc’s analysis (which we’re looking into) but it’s quite another for the retailer to go all Donald Trump about it.”
Pirc did not immediately respond to a request for comment.
A spokesman for Sports Direct said:
This is fake news that appears to have been either deliberately or recklessly circulated by an irresponsible organisation that is making headlines at the expense of Sports Direct.
We have contacted PIRC to request a copy of the report and we will be writing to them to express our disappointment.
It is incorrect to state that Sports Direct has the second-highest ratio of chief executive-to-average employee pay.
The table published by City AM claims that Sports Direct had a chief executive-to-average employee pay ratio of 400:1, a result Sports Direct disputes. The company said:
The incorrect data table was presumably based on an unvested bonus entitlement that was previously accrued by Dave Forsey, the former chief executive of Sports Direct. This entitlement was accrued over several years (which was not immediately apparent from the published PIRC list, neither would it have amounted to the sum in question), but in any event, Mr Forsey chose to forego the bonus, which was never paid.
The bonus award in question was granted in 2011 and subject to the satisfaction of four Underlying EBITDA targets for FY12 to FY15, and was due to vest in 2017, but, as stated, was never paid to Mr Forsey. This is explained more fully in the Directors’ Remuneration Report on pages 60 and 61 of the Company’s 2016 Annual Report and Accounts. The true ratio over the period in question would therefore have been closer to 9:1, according to PIRC’s own calculations.
Sports Direct’s founder and chief executive Mike Ashley – who took on the role last September following a management reshuffle – does not and have never drawn a salary, they added.
The City AM report said, citing Pirc, that the Sports Direct result “was heavily skewed” because of a bonus, which they stated its chief executive had received. “In 2016, 2014, 2013 and 2012, the CEO received a salary of £150,000, which would bring the pay ratio down to 9:1,” the report said.
Sports Direct has come under fire in recent months for paying some employees less than the minimum wage because they had been forced to queue for security checks on unpaid time. A parliamentary report said, “[Sports Direct is] treating workers as commodities rather than as human beings.” The group recently began the search among its 23,000 staff for a workers’ representative who will attend board meetings.