- Sports Direct asks shareholders to approve £11 million payment to Mike Ashley’s brother John.
- The proposal follows legal review, which found John was not paid for delivery services he has carried out for Sports Direct since 2007.
- Mike Ashley abstaining from the vote, says he expects independent shareholders to reject the proposal but hopes they won’t.
LONDON — Sports Direct is asking shareholders to approve a £11 million payment to the brother of its billionaire founder Mike Ashley, claiming John Ashley has been underpaid for his role in the business for years.
Sports Direct said on Friday that a review by law firm RPC into the role of Ashley’s brother John in the business found he has been underpaid since the company floated in 2007.
“Had [he] been treated equally with other senior executives who helped to build the Company, he would, in fact, have received additional remuneration payments totalling c. £11m, which he was denied because of concerns at the time about public relations,” Sports Direct said in a statement.
The review by RPC was initiated after the Financial Times revealed last year that John Ashley was handling international deliveries for the discount sports retailer through a company called Barlin Deliveries. Subsequent investigations by Business Insider found that John Ashley “did not receive any remuneration from the company in either form of salary or dividends” even though millions of pounds flowed through the business.
Sports Direct has called a general meeting on December 13 where it will ask independent shareholders to vote on the proposed payment. Mike Ashley, who owns just over half of the business, will abstain from the vote.
“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,” Ashley said in a statement.
“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.”
Ashley, who is also CEO and executive chairman of the business, has repeatedly clashed with investors over governance of Sports Direct, which independent shareholders have criticised as opaque.