On Friday, Sports Direct announced underlying profits of £200 million, to the year ending 24 April 2011. The total bonus pot for staff is £88 million, which will be divided between 2,200 full time employees.
Dave Forsey, chief executive of the company, which owns Sports World and Lillywhites, said: "I am especially pleased that we can again advise our employees that we have met this year's underlying EBITDA targets for the Bonus Share Scheme that covered the 2010 and 2011 financial years.
"As a result of attaining both years' targets they will be sharing in the Group's success by receiving Sports Direct shares in both 2012 and 2013. These were ambitious stretch targets of £155 million in 2010 and £195 million in 2011 where we actually attained £160.4 million and £200.4 million. We thank our colleagues for all their efforts to achieve these results.
"Due to the success of the Bonus Share Scheme in 2010 and 2011, and the fact that it underpinned the Group's performance over the past two years, the Company will be launching a four year scheme covering the 2012, 2013, 2014 and 2015 financial years."
Sports Direct incentivised employees by enabling them to share in the Group's success through the 2009 Bonus Share Scheme. The Bonus Share Scheme is focused on underlying EBITDA and is designed to motivate colleagues, help improve retention of key employees and to align the interests of employees and shareholders. The share scheme is also aligned with the Group's business plan.
The bonus is in two stages. The first bonus is 25% of base pay in shares of £1 per share. The first bonus target was underlying EBITDA of £155m in 2009-10 and was achieved in that Year. The first bonus will vest in 2012.
The second bonus is 75% of base pay in shares of £1.25 per share. The second stage of the bonus was conditional upon the first bonus target being met in 2009-10, attaining underlying EBITDA of £195 million in 2010-2011, and underlying EBITDA /Net Debt ratio of two or less at the end of 2010-11. All these targets were achieved in the Year.
The shares vest, subject to continuous employment until 2013.
The company now plans to launch the 2011 Bonus Share Scheme to follow on from the previous scheme. It will be a four-year scheme based upon achieving underlying EBITDA before the costs of the scheme of £215 million in 2012, £250 million in 2013, £260 million in 2014 and £300 million in 2015 coupled with the individual employee's satisfactory personal performance.
The scheme requires that all targets are met before the shares will vest. The vesting periods will be summer 2015 (approximately 8 million shares) and summer 2017 (approximately 26 million shares).
