Sports Direct’s independent shareholders have blocked a proposed £11m payout to the brother of Mike Ashley, the company’s founder and majority shareholder.

Shareholders voted by more than 70% to reject the plan for a payout to John Ashley at a special general meeting on Wednesday morning.

Sports Direct received heavy criticism from shareholders and corporate governance experts last year after it emerged the sportswear retailer was paying a company owned by John Ashley to deliver its online orders outside the UK. The arrangement with Barlin Delivery Ltd, which was unwound earlier this year, had not been disclosed in Sports Direct’s annual report.

In November, Sports Direct issued a statement saying it wanted to pay John Ashley £11m because he had been underpaid for previous work. Mike Ashley, who owns about 61% of Sports Direct’s stock, said he would not participate in the vote to give independent shareholders a say on the matter.

Alongside the statement confirming that independent shareholders had firmly rejected the payout, Sports Direct’s board issued a statement saying it “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,” it said.

The board said it “respects the views of the company’s independent shareholders, and considers all these matters to be closed. We now intend to move on.”



Speaking before the vote, at least one shareholder told the Guardian that they would not be supporting the payment because the company had not provided evidence or detail explaining why it believed £11m was owed to John Ashley.

Nearly 66% voted against a separate plan for a £3-a-share minimum payout to executives Karen Byers and Sean Nevitt – the only remaining participants in the Sports Direct executive bonus share scheme – if they elected to exercise their shares before September 2018, or £4 a share after that month.