Just days after landing a new four year revolving credit facility, the board of Shirebrook-based Sports Direct has called a General Meeting to vote on whether the brother of owner Mike Ashley should be paid £11m.
Previously,John Ashley had foregone payment, on the grounds of concerns expressed by shareholder groups, but in a new turn of events shareholders are now to vote on whether the payment should be made.
Mike Ashley has said he will abstain from the vote.
The company’s legal advisors RPC were asked by the Board earlier this year to review John Ashley’s history with Sports Direct since it floated in 2007.
Sports Direct says this review was to investigate and report on the total amounts paid in money and in kind to John Ashley, which had been called into question given his position as brother of Mike Ashley.
The report concluded that if John Ashley had been treated equally with other senior executives who helped to build the company, he would, in fact, have received additional remuneration payments of around £11m, which he was denied because of concerns at the time about public relations.
Chief Executive Mike Ashley said: “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.
“I always put the interests of Sports Direct ahead of my own. An example of this was the loan facility for £250m that I previously made available to the Company. No arrangement fees or commitment fees were ever charged on this facility, which was capped at an interest rate of 0.5%. This was at least 50% below the prevailing rate that Sports Direct was paying at the time, and the facility saved the Company in excess of £1m. I want you to know that I will continue to put Sports Direct first as we move forward together.”
The meeting will take place on Wednesday, 13th December at the firm’s Shirebrook headquarters.