Sports Direct shareholders have criticised the retailer’s decision.
It would vote against the payment as it was a “consequence of poor governance”.
The fund manager has a 0.18% stake in Sports Direct worth about £3.7m.
Ashley Hamilton Claxton, Royal London’s head of responsible investment, commented: “If appropriate governance measures were in place at Sports Direct in the first place, there would have been a clear and transparent process for paying John Ashley what he was due and there would be no need to review his compensation after the fact. Investors need to see a plausible reason as to why John Ashley is owed money, not how much he is owed.”
Paul Lee, head of corporate governance at Aberdeen Standard Investments, added: “It’s really difficult to see how it’s in our clients’ interest to support the proposal. This is a back payment from 10 years ago, for which our clients get no new benefit.”
John Ashley, Mike’s elder brother, departed as the retailer’s IT chief in 2015 to join a company that held a contract with Sports Direct.
An internal Sports Direct investigation was conducted this year by its legal advisors RPC and accountants Smith & Williamson. It concluded that John Ashley had been underpaid for his work since the company listed on the stock market in 2007 and was owed £11m in bonuses and performance-related share awards.
The founder’s brother was denied the payments “because of concerns at the time about public relations”, the company said.