JD Sports shareholders vote remuneration chair off board amid row over boss's pay
The chair of JD Sports' remuneration committee, that approved an unpopular £4.3m bonus for the company's executive chairman and CEO, has been voted off the company’s board.
JD Sports confirmed that it had parted ways with Andrew Leslie, after it failed to convince enough independent shareholders to vote for him at its AGM today.
Leslie, who has been on the board since 2010, was chairman of its remuneration committee, which makes decisions on how much to pay the top management.
This year, the committee handed a £4.3m bonus to JD’s executive chairman, Peter Cowgill, in a move that went down badly with investors.
A little under 55% of independent shareholder votes were cast against re-appointing Leslie to the board.
Shareholders also cast 31.5% of their votes against the remuneration report, which includes Cowgill’s bonus, JD said after the meeting.
It added that a new, long-term, incentive plan and remuneration policy had been approved with a higher margin.
“The board has spent a significant amount of time engaging with its shareholders during the course of the past year and has used the feedback from this engagement to shape its remuneration structures in a way which achieves better alignment with shareholder interests,” JD said.
Cowgill said: “On behalf of the board, I would like to thank Andrew for his valued contribution to the company, during a period which has seen significant growth and international development.”
More than 15% of shareholders also voted against re-electing Cowgill to the board.
Earlier today, JD Sports had increased its profit outlook after solid trading since shops reopened, but warned over the impact of the current resurgence in Covid-19 cases.
Britain’s biggest sportswear group said trading has been “particularly encouraging” in the UK since lockdown restrictions have eased, while most of its 3,300 stores worldwide are also now open apart from some across the Asia Pacific region.
It raised its pre-tax profit expectations for the year, saying it is set for “no less than” £550m, up from £324m in the previous year thanks to the trading boost and a more resilient online performance during store closures.
But the group said the rise in coronavirus cases amid the spread of the Delta variant, first identified in India, is affecting its core customer base more than previously in the pandemic.
It said that this, together with the uncertainty over the crisis and possible further lockdowns, means it will wait before handing back any Government furlough support.
The group said: “We are cognisant that the retention of sales in the period when the stores were closed, combined with the positive trading in the immediate period after reopening, did help to offset the negative financial impacts associated with the period of temporary closures.
“However, we must also acknowledge that the uncertainty surrounding Covid has not yet fully passed and the current resurgence in infection rates is affecting our core customer demographic more than was the case previously.”
It confirmed it would decide on furlough cash repayment when there is “certainty on both the full easing of restrictions and the consequences of any further lockdowns during our peak trading period this winter”.
JD Sports said it also plans to split Peter Cowgill’s role of executive chairman and chief executive before the next AGM and will start a “comprehensive process” shortly.
It said it accepts that the make-up of the group’s board should “reflect the current scale, momentum and global positioning” of the firm and its higher stock market valuation.