Sport Direct’s 2,200 permanent staff will receive a share bonus averaging £44,000 each after the sports retailer hit its profit targets for the second year in a row.
The chain, which was founded and is still controlled by Newcastle United owner Mike Ashley, reported underlying profits of £200.4 million for the year to 24 April, beating its target of £195 million. It also made a £171.2 million profit last year, ahead of its £165 million target.
As a result, the firm’s bonus share scheme pot of £88 million will pay out shares worth an average of about £30,960 to each staff member – a figure that is believed to be the largest windfall of its kind in the retail sector to date. The only other major retailer that pays out big staff bonuses is the John Lewis Partnership. It awarded an average of £2,500 in cash to its 76,500 personnel in March.
When combined with last year’s payout, the Sports Direct bonus scheme, which was first announced in 2009, will see permanent staff awards worth an average of £43,860, however – more than twice the average salary of £20,000.
Staff will not be able to start cashing in the shares for at least a year though and will have to wait until the summer of 2013 to realise the lion’s share (about £31,000). The scheme also does not cover those employees who work part-time or are on flexible contracts, who will again go empty handed.
Sports Direct, which owns the Sports World and Lillywhites’ stores, said that its bonus scheme had been key to its performance over the last two years and would be extended for another four.
Chief executive Dave Forsey added: “This has been an excellent year of growth for the group in what has been a challenging retail environment. Key to this growth has been the success of our employee bonus share scheme, which we introduced to focus the whole group on our5 ambitious growth targets.”
The group, which operates more than 350 stores in the UK, was also confident of hitting profit targets of £215 million for the current financial year, he said.