Mike Ashley faces shareholder rebellion at Sports Direct AGM
Mike Ashley could face a shareholder revolt at Sports Direct’s annual general meeting next month after two proxy advisors recommended investors vote to oust him from the board.
Pensions and Investment Research Consultants (Pirc) and Glass Lewis have both urged shareholders to oppose the re-election of Ashley, the firm’s chief executive and founder, at a meeting on 11 September.
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Pirc has also opposed the re-election of chairman David Daly and directors Richard Bottomley, Nicola Frampton and David Brayshaw. It has recommended shareholders support the election of employee representative Cally Price.
The recommendations follow a chain of controversies at the company including the resignation of its auditor Grant Thornton and a €674m Belgian tax bill that delayed the company’s latest annual results.
Ashley’s acquisition spree, which has seen Sports Direct snap up Game, Evans Cycles, Sofa.com and Jack Wills and make a failed attempt to buy Debenhams in the last year, was also highlighted by the shareholder advisory firms as a reason to block his election.
In a note to investors Pirc said “shareholders of the company are faced with a decline in profitability, loss of value for their shares, no dividend distribution and a further potential loss when the tax evasion case concludes”.
Glass Lewis said that as the chief executive, founder and figurehead of the company Ashley is “inextricably linked with the myriad controversies, past and ongoing” which have caused “serious reputational damage”.
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The note added: “A recurrent theme underlying the various controversies is disregarded for the rights and concerns of independent shareholders, of which the delayed publication of results is a manifestation.”
Glass Lewis also pointed to Ashley’s 75 per cent attendance at board meetings as a reason to oppose his re-election.
Ashley owns 61 per cent of the company’s shares.
Sports Direct declined to comment.