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LONDON (Reuters) - The billionaire founder of Sports Direct (SPD.L) could net a one-off shares bonus worth about 39 million pounds after Britain's biggest sporting goods retailer said it was considering a new payout proposal.
The group, which owns Sports Direct.com and Lillywhites stores as well as brands like Slazenger, said it was considering granting majority shareholder Mike Ashley 10 million shares, which would vest in 2018 if performance targets were met.
Ashley holds 71 percent of Sports Direct's equity and is executive deputy chairman. He takes no salary and generates significant free advertising for the firm through his ownership of English Premier League football club Newcastle United.
Shares in the FTSE 250 firm, which have doubled in value in a year, were down 6.0 percent to 384.7 pence at 1249 GMT, valuing Ashley's potential payout at about 39 million pounds.
The new proposal comes after the firm's shareholders in September rejected plans to grant Ashley 8 million shares because of the limited performance criteria involved and because the scheme was potentially open to other executives.
Sports Direct said that, after listening to feedback, the new scheme would be specific to Ashley and included new performance targets. The revised proposal would have to be passed by shareholders and will likely be put to them in early 2013.
"The board remains committed to implementing a scheme to recognise the ongoing substantial and essential contribution of Mike Ashley," it said on Thursday.
The news came as the firm reported a 17 percent rise in profit for the first half of its financial year, helped by a sporting summer which included a strong performance from Britain at the London Olympics. It added that it expected to raise its profit targets for 2014 and 2015.
The group said underlying earnings before interest, tax, depreciation and amortisation (EBITDA) and before the costs of its employee bonus share scheme were 163 million pounds in the 26 weeks to October 28.
That compared with 139.2 million posted in the same period a year ago. The group is targeting underlying EBITDA for 2012-13 of 270 million pounds, before a charge for bonus share schemes.
The group said that based on its strong performance it would likely increase its underlying EBITDA targets for the next two financial years from 290 million pounds to 310 million in 2014, and from 340 million pounds to 360 million in 2015.
While many UK retailers have struggled as consumers grapple with rising prices and muted wage growth, heavy discounter Sports Direct has coped well, benefiting from the woes of its rivals, a growing internet presence, highly motivated staff due to a lucrative bonus scheme and European expansion.
In October the firm bought 20 stores and nearly all the stock of rival JJB Sports after it fell into administration and closed the bulk of its stores.
Analysts at Panmure Gordon maintained its 'Buy' rating on the stock: "Sports Direct has announced excellent profit growth in H1 and there looks to be plenty of momentum in all of its businesses. It clearly fully-capitalised upon the summer of sport and, given its asset acquisitions from the administrator, it should continue to benefit from the demise of JJB."
Editing by Keith Weir and Mike Nesbit