JJB incentivises turnaround plan

Sports retailer to grant award to acquire shares to directors and senior managers involved in company’s turnaround plan

Sports retailer JJB has laid out plans to initiate an equity incentive plan that will provide directors and senior managers involved with ensuring the company’s survival in the market with an award to acquire shares in the business.

JJB said the equity incentive plan is designed to incentivise directors and senior managers to execute the company’s ongoing turnaround plan successfully and ‘share in the value that would be created in the process’.

Under the plan, Mike McTighe, Keith Jones, Dave Williams and David Adams, as well as a number of senior managers within the company, will be awarded a grant to acquire shares.

Participants will be in-line to receive new JJB shares worth in aggregate 20 per cent of the growth in value of the company in excess of a market capitalisation of £96.5m, representing the total equity investment led by the company’s major shareholders as part of its restructuring and increasing by five per cent per annum until vesting.

It said no new JJB shares will vest with management unless the company’s market capitalisation exceeds the hurdle of £96.5m, but the plan design encourages participants to exceed the hurdle and furthermore to exceed a target market capitalisation of £193m.

In addition, the scheme will replace existing long-term incentive plans, with Keith Jones voluntarily relinquishing all of his entitlements to the 2009 option scheme.

The JJB board intends to call a general meeting to approve the equity incentive plan.

Non-executive director Sir Matthew Pinsent and Richard Bernstein will be exempt from the equity incentive plan, with Bernstein saying: “As both a non-executive director and shareholder representative, I believe that it is now appropriate to align shareholders’ interests with those entrusted to deliver on the turnaround.

“For these targets to be met, a very substantial share price increase will be required. That is the opportunity that I look forward to seeing realised.”