By Simon Jessop and Esha Vaish
LONDON (Reuters) - A group of UK public sector pensions recommended on Monday that its member funds oppose Sports Direct's planned 2015 bonus share scheme, citing concerns over the sports retailer's remuneration of its chief executive officer.
The Local Authority Pension Fund Forum (LAPFF), a voluntary association of 60 public sector pension funds with combined assets of around 120 billion pounds ($204.19 billion), said the plan was "inappropriate."
"LAPFF believes that it is inappropriate to establish an incentive plan with a single board member in mind, especially one whose company has a 57.7 percent holding in Sports Direct," Forum Chair Councillor Kieran Quinn said in a statement.
Quinn said the bonus plan "creates a bias in favour of Mr Ashley as well as the impression that he is creating the scheme for himself," and that he should be rewarded through dividends on his shares in the company.
"It would also be preferable to establish a salary for Mr Ashley on which his contribution to a bonus pool could be based, rather than creating an arrangement for him that is different from that of the other board members," he said.
Sports Direct will canvas shareholder opinion on the scheme at a meeting on Wednesday, marking the fourth attempt to agree a payout to founder Mike Ashley, who receives no salary or other bonus from Sports Direct. [ID:nL5N0OQ1GY]"We are concerned that people are missing the point. These shares would not fully vest for seven years and depend on a very strong performance for the next five years," a source close to Sports Direct told Reuters. "This scheme means it can retain and reward staff." Ashley, who founded the company in 1982, owns around 58 percent of the company.
($1 = 0.5877 British Pounds)
(Reporting by Simon Jessop in London, Karen Rebelo and Esha Vaish in Bangalore; Editing by Laura Noonan and Bernadette Baum)