Sports Direct’s investors have blocked a proposed £11m payout to the brother of majority shareholder and founder Mike Ashley.
John Ashley had been in line to receive a possible £11m after a report found that he “had foregone substantial remuneration from the company”.
The report, by Sports Direct’s legal advisers RPC, came about after an internal review raised concerns about his history with the retailer since it floated in 2007.
It found that John Ashley, who had a salary of £150,000 the year following the float and received a bonus of £706,502 under a separate employee bonus scheme, had not been paid in line with other senior executives due to concern about how the public would react to his remuneration.
Majority shareholder Mike Ashley – who has previously voted against other Sports Direct shareholders on controversial issues such as the continued tenure of chairman Keith Hellawell – abstained from the vote. Just over 70% of the remaining shareholders blocked the £11m payout.
Shares in Sports Direct, which will report first-half results tomorrow, were down 2.2% this afternoon.
The sports and leisure specialist suffered its worst full-year profit figures in six years in July after it was hit by currency movements following the Brexit vote and depreciation charges.
Underlying pre-tax profits slumped 58.7% to £113.7m in the year to April 30, while group EBITDA fell 28.5% to £272.7m.