Sports Direct cancelled a general meeting for Friday after a lack of shareholder support for the scheme, which would have handed Mr Ashley eight million shares if targets were met for this year and 2015.
The investor rebellion marks the second time in less than two years that Sports Direct has seen a bonus scheme for the Newcastle United owner rejected by shareholders.
Another previous attempt did not make it to a vote.
The group needed more than 50 per cent of investors to approve the scheme at Friday's vote, but it is thought some large shareholders were worried the plans were not in line with corporate best practice as they did not include other company executives.
Dave Singleton, non-executive director and chairman of the remuneration committee at Sports Direct, said: "During our ongoing discussions with institutional shareholders, it became apparent that, while we had the support of some of our largest shareholders, we had not been able to secure the requisite level of shareholder approval.
"While the board is disappointed that this resolution will not now be passed, we respect shareholders views. We remain convinced of the benefit of aligning Mike Ashley's interests with those of all other shareholders."
Mr Ashley - deputy executive chairman at the retailer - has not received a salary or bonus since the retailer floated in 2007.
But he netted £929m in the flotation and has also since banked hundreds of millions of pounds by selling further shares in the business.
He still owns just under 62 per cent of the group.
Sports Direct plans to put new proposals to investors at its annual general meeting in September that will see employees - including Mr Ashley - share out 25 million shares worth more than £220m if earnings targets for 2016 to 2019 are met.
Independent retail analyst Nick Bubb said: "Many investors struggle with the idea that Mike Ashley needs any extra incentive, given his huge shareholding in the company, but the Sports Direct non-executives are persevering and are now aiming to get approval at the AGM in September for a new and more stretching and more inclusive bonus scheme."
Mr Ashley established Sports Direct on leaving school in 1982 and was the sole owner until the groups stock market listing in March 2007.
The group has around 400 UK stores and operations in 19 countries in Europe. It also owns brands including Dunlop, Karrimor and Slazenger.
Part of Sports Direct's recent success has been put down to the company's employee bonus scheme, which last summer rewarded about 2,000 staff with shares worth about £68,000.
The 2011 staff scheme is also on track to reward more than 3,000 staff having already surpassed two of the four earnings targets.