SPORTS DIRECT ACCUSES SHAREHOLDERS OF SPREADING ‘FAKE NEWS’ OVER EXECUTIVE PAY RATIO CLAIMS
Sports Direct has accused a shareholder lobby group of “fake news” over claims regarding its executive pay ratios. It says a PIRC (Pensions & Investment Research Consultants) report wrongly states the firm has a chief executive-to-average-employee pay ratio of 400:1.
The retailer says the PIRC figures include a bonus that was never paid, and a “true ratio” would be about 9:1.
PIRC denied these claims, saying its analysis of the period from 1 August 1 2015 to 31 July 31 2016 was correct.
It added in a statement: “At the time of collation, PIRC’s analysis of the ratio for the period under review was correct. Changes to the company remuneration scheme in subsequent periods will be updated in our 2017 annual review.
“Far from being ‘fake news’, PIRC’s analysis was correct and the company had an opportunity to question our analysis at that time. The [Sports Direct] remuneration policies that led to PIRC’s analysis were only subsequently amended.”
A chief executive-to-average-employee pay ratio of 400:1 would be the second highest in the FTSE 350.
Sports Direct had said that the data sets used in the PIRC study were “incorrect”, and included a bonus entitlement which was accrued by former chief executive Dave Forsey, but was never collected.
“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,” a spokesman for Sports Direct said.
“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.”
Over the past year Sports Direct has faced a barrage of criticism over its financial performance, corporate governance and conditions for workers at its warehouse in Shirebrook, Derbyshire.
A report by the House of Commons Business, Innovation and Skills committee said employees of the company were “not treated as humans“.
Since then, the company has promised an independent inquiry and to undertake significant reforms, including offering compensation to workers who had been underpaid.
Several senior employees have left the company. Mr Forsey stepped down as chief executive and was replaced by Mr Ashley. Veteran banker David Brayshaw was recruited as an independent director.