Mike Ashley is facing a potential shareholder revolt at Sports Direct’s AGM scheduled this coming Wednesday, with another advisory firm adding pressure on investors to vote against his re-election.
Influential advisory group ISS has now joined Glass Lewis in urging shareholders to vote against the re-appointment of Ashley as the retailer’s chief executive.
Ashley, who founded Sports Direct and is currently under pressure to turnaround House of Fraser’s fortunes after acquiring last month, was criticised by ISS for “continued failures” as the boss of retail giant.
ISS added that plans to hand Michael Murray, the future son-in-law of Ashley, £5 million for his role as head of elevation “exacerbated” its concerns.
ISS also said that Ashley had displayed an “apparent unwillingness” to listen to the concerns of Sports Direct’s independent shareholders.
The advisory firm’s criticisms comes shortly after Glass Lewis slammed Ashley for overseeing many years of “poor governance” at the retailer, adding that negative media stories against him have damaged Sports Direct’s public image.
Glass Lewis also pointed to the retailer’s “poor gender diversity practices”, arguing that Sports Direct does not have a meaningful board diversity policy or measurable gender objectives.
ISS and Glass Lewis have also opposed the re-election of chairman Keith Hellawell.
A former policeman, Hellawell narrowly survived as the chairman in the face of earlier revolts thanks to the support Ashley, who continues to be majority owner of Sports Direct with a 61 per cent stake.
In 2016, over half of the independent shareholders voted against Hellawell, and a second vote in January 2017 saw 54 per cent of the independent shareholders vote against him.
However, a third vote last year saw Hellawell scrape through because of the support of 53 per cent of independent shareholders.
In a report, ISS said: “These votes of no-confidence from independent shareholders suggest that Keith Hellawell’s continuation in the position of chair is not tenable.”
A spokesperson from Sports Direct said: “We hope that shareholders will continue to recognise the further positive progress that we have made over the last 12 months.”