Sports Direct shareholders reject John Ashley payout
Sports Direct shareholders have rejected the company's proposed £11m payout to founder Mike Ashley's brother for his work as an IT expert.
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Results of a general meeting on Wednesday revealed that 70.7% of shareholders voted against the payout. Mike Ashley abstained from the vote.
"The board trusts that shareholders will welcome the steps taken to reassure them that John Ashley did not benefit inappropriately from being the brother of majority shareholder Mike Ashley. In fact, John was actually disadvantaged by approximately £11m after he forewent bonuses that he would have received if he were treated equally to other executives who helped to build the company.
"By voluntarily abstaining from voting on this issue, the board has provided the company's independent shareholders the opportunity to determine whether or not to make a retrospective payment to John Ashley. The board respects the views of the company's independent shareholders, and considers all these matters to be closed. We now intend to move on."
Last month, Sports Direct said that a report by the group's legal advisors, RPC, found that if John Ashley had been treated the same as other senior executives who helped to build the company, he would have received additional remuneration payments totalling around £11m, which he was denied because of concerns about public relations.
Mike Ashley said at the time: "I intend to voluntarily abstain from the vote on whether or not John should receive the money that he would otherwise have earned at Sports Direct if he were not my brother. I fully expect that independent shareholders will vote against this proposal due to the passage of time involved, although in my opinion, technically the money is owed and therefore should be paid.
"It's important for me to say that if John had owed one pound to Sports Direct, I would have ensured any sum was repaid in full. I hope shareholders will therefore be reassured that everything is in order and that any concerns are laid to rest."
At 1330 GMT, the shares were down 2.4% to 379.80p.