TaxPersonal TaxOn the money with Gavin Hinks

On the money with Gavin Hinks

I feel the need to return to the subject of Bob Mellors, the embattled finance director of Sports Direct

Gavin Hinks, AccountancyAge

Gavin Hinks, AccountancyAge

First he was in the news because he wasn’t allowed to speak to analysts. Then
when he did there were claims in the Sundays that it was ‘farcical’, which
turned into demands for his departure. And last week we learned that he is
receiving an exceptional bonus of £5m, which is unlikely to improve his stock in
the City. His personal stock, by the way, is not to be confused with the
company’s stock, which has also taken a tumble.

A little while ago I said Mellors’ failure to front up to analysts lacked the
commitment of a modern FD. But I’m beginning to see things differently.

Principally because Mike Ashley, the maverick executive and founder of Sports
Direct, has stuck by Mellors so loyally despite pressure from the City and in
the press. A more easily influenced CEO might have showed his FD the door,
worrying that if people disliked him they would lose trust in the company and
share prices would be at risk.

Not so at Sports Direct. Ashley must really like Mellors. Then a reader wrote
on my blog (http://insider.accountancyage.com) vociferously defending the FD.
The reasoning was that Mellors has been working with Ashley for 20 years and
built the company with him. He’d done the hard work, knew the business inside
out and ? this, incidentally, is the crux ? was a man that took a ‘long term’
view.

Now that’s a novelty among listed companies where the time horizon usually
doesn’t extend much further than the next quarter.

Ashley therefore must also be a man who takes a long view. In which case, the
pair are always going to wind up the City. Don’t expect things to settle down
too soon at Sports Direct.

Gavin Hinks is the editor of Accountancy Age

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