Sports Direct blasts 'fake news' over former CEO salary

Sports Direct has blasted reports of its new chief executive receiving a salary hundreds of times greater than the average employee as "fake news".

Data compiled by the Pensions & Investment Research Consultants (PIRC) and published by newspaper City AM, which has since seemingly removed it, claimed the ratio between the CEO's pay and its workers stood at 400:1, the second-highest of any FTSE 350 companies.

However, a company's spokesman dismissed the report on Wednesday (15 March).

"The table incorrectly claims that Sports Direct had a chief executive-to-average employee pay ratio of 400:1, the second highest in the FTSE 350," he said.

"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."

Sports Direct added the incorrect data presumably attributable to PIRC including an unvested bonus entitlements in its calculations, which was accrued by former CEO Dave Forsey. Forsey, who was replaced in the role by group founder and major shareholder Mike Ashley in September last year, opted to forego his bonus.

Once the bonus is stripped out of calculations, the CEO-to-employee pay ratio drops to around 9:1.

"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, Forsey chose to forego the bonus, which was never paid," the company added.

Last week, the company said it had kicked off the process to appoint a shop floor representative to its board, as it faces intense political and shareholder pressure over working conditions.

The retailer, founded in 1982, said it will hold an election for a workers' representative among its 23,000 directly employed staff, who will then attend board meetings to "champion the interests of all staff".

The move comes after a series of running battles the company has waged with investors and MPs over corporate governance and conditions at its main Shirebrook warehouse in Derbyshire.

Last year MPs on the business select committee accused Sports Direct of employing "Victorian workhouse techniques".