By Tom Winnifrith, The Sheriff of AIM | Wednesday 15 March 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
The staff of Corporate Governance tossers PIRC are a parasite sucking the lifeblood from the capitalist system and so it is delightful to see them doubly humiliated today. First up they backed the despised board at Bowleven (BLVN) who were ousted by shareholders. Now they appear to have done the impossible: make loathsome lardball Mike Ashley look like a hard done by victim by publishing some very fake news...
PIRC says it is a company founded in 1986. Great as a company interested in corporate governance and executive pay you would have thought it would put its won annual report up on its own website with full disclosures about its own pay levels. Maybe I have missed it but I cannot find it. I have asked its press office for a steer but no reply has arrived yet.
Anyhow back to Ashley. PIRC lambasted his Sports Direct (SPD) for having the second highest CEO pay to average employee pay in the FTSE 350 at 400.1. There is only one problem with that. It is complete and utter bollocks.
Sports Direct states:
"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 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. The Company's current Chief Executive, Mike Ashley, does not draw a salary, and never has."
Hmmmmm 400:1 down to 9:1. That sounds like a bit of a schoolboy error. So PIRC now not only backs grossly overpaid and underperforming boards but it can't get its sums right and publishes fake news. I noted in a previous article that every recommendation it makes should be doubted. We can now go one further with the statement that every fact it states is quite possibly wrong.
Quite simply PIRC is not fit for purpose
Never miss a story.
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