By guest author Elias Jahshan from Retail Gazette
- JD Sports shareholders gave the boot to remuneration director Andrew Leslie at its AGM yesterday
- It follow an unpopular decision to hand a GBP 4.3 million bonus for executive chairman Peter Cowgill
- 55 % of independent shareholder votes were cast against re-appointing Andrew Leslie to the board
JD Sports shareholders have given the boot to the retailer’s remuneration director in light of an unpopular decision to hand a GBP 4.3 million bonus for executive chairman Peter Cowgill.
The sportswear giant said it had parted ways with Andrew Leslie, after it failed to convince enough independent shareholders to vote in favour of keeping him on the board of directors at the AGM yesterday afternoon.
Leslie, who has been on JD Sports’ 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 GBP 4.3 million bonus to Cowgill, 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 Sports said.
The retailer 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 Sports 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.
Meanwhile, JD Sports confirmed plans to split Cowgill’s role of executive chairman and chief executive before the next annual general meeting and will start a “comprehensive process” to find a new chief executive shortly.
It said it accepted that the make-up of the board should “reflect the current scale, momentum and global positioning” of the retailer and its higher stock market valuation.
The AGM took place shortly after 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.
The UK’s biggest sportswear retailer said trading has been “particularly encouraging” in the UK since lockdown restrictions have eased, while most of its 3300 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 was set for “no less than” GBP 550 million, up from GBP 324 million the previous year thanks to the trading boost and a more resilient online performance during store closures.
However, the group said the rise in Covid-19 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 would wait before handing back any government furlough support.
“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,” JD Sports said.
“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”.