During a general meeting on Wednesday, 70.7% of the investors voted against the pay package, despite a review that found Ashley was disadvantaged by £11m after he declined bonuses that he would have received “if he were treated equally to other executives who helped to build the company”.
His brother, Sports Direct founder Mike Ashley abstained from voting, and the retailer said in a statement it “respects the views of the company's independent shareholders, and considers all these matters to be closed. We now intend to move on”.
John Ashley had a salary of £150,000 before Sports Direct’s initial public offering and received a bonus of £706,502 under an employee bonus scheme.
Mike previously said he did not expect shareholders would vote in favour of the payment.
In November, Mike said "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.”
Last year, Sports Direct came under fire after it emerged that the retailer paid a company owned by John to deliver online orders outside the UK on its behalf.
The company paid hundreds of thousands of pounds in undisclosed payments to Barlin Delivery. John’s company made £300,000 in profit each year from its work for Sports Direct, but has no vans or drivers and subcontracts it delivery work to couriers such as DHL.
Shareholders questioned the arrangements at the time, as these were not disclosed in Sports Direct’s accounts.
Mike managed to save the chairman Keith Hellawell from a shareholder revolt during January’s general meeting.
Even though the majority of shareholders voted against Hellawell’s re-election as chairman of the retailer, the majority vote of the chief executive ensured his reappointment.