(qlmbusinessnews.com via bbc.co.uk – – Mon, 14th June 2021) London, Uk – –
JD Sports is facing an investor backlash after handing its boss a £4.3m bonus despite benefiting from millions of pounds in Covid support.
Executive chairman Peter Cowgill's total pay, including a short-term salary reduction, reached nearly £5m.
Shareholder advisory group Glass Lewis has urged investors to vote against the “inappropriate” pay policy.
JD Sports defended its pay policy. saying it reflected the group's “sustained outstanding performance”.
“The posting of exceptional results during such a challenging climate demonstrates that the remuneration approach and steps taken throughout the pandemic continue to support and drive this performance.”
During the pandemic, the retailer has received £61m through the UK furlough scheme and an estimated £38m in business rates relief.
The company has also benefitted from an additional £25m in wage support from other countries where it operates, including the US.
JD Sports was also granted a £300m loan through the Bank of England's Covid Corporate Financing Facility Scheme which was set up to help larger firms through the pandemic.
The company said it had not used any of the loan by the time the scheme closed in March.
As a non-essential retailer, JD Sports was forced to close during lockdown. However, the company, which has stores across the UK, Europe, the US and Asia Pacific, reported a 0.9% rise in revenues to £6.1bn as it shifted sales to online.
Pre-tax profit fell by 7% to £324m.
JD Sports will hold its annual general meeting on 1 July when shareholders will be invited to vote on the company's remuneration report alongside other resolutions.
The bulk of Mr Cowgill's bonus for last year came from a special award of £6m which was granted to the executive chairman in 2019 to reflect his “exceptional performance” and was to be paid in instalments.
JD Sports had already paid out £3m prior to the Covid pandemic. The company then delayed a £1.5m payment that was due in October 2020.
The company said in its annual report: “In the light of developments caused by the Covid-19 pandemic, it was agreed that the remaining payments would be deferred and paid when the board and committee were satisfied it is appropriate to do so.”
The payment went ahead in January this year “following a detailed review”. The additional final instalment of £1.5m has also since been paid to Mr Cowgill.
Stripping out these payments, Mr Cowgill's bonus for the last financial year was £1.3m compared to £1.7m in the previous 12 months.
Mr Cowgill also reduced his basic salary by 75% though this was only between April and August last year, after which it returned to normal levels.
According to The Sunday Times, Glass Lewis is also recommending that shareholders vote against the re-election of Mr Cowgill due to what it claims is inadequate succession planning.
It also said there had been a lack of progress on the board's gender diversity. Mr Cowgill and chief financial officer Neil Greenhalgh are the only members of the executive board.
There are five non-executive directors comprising three men and two women, Heather Jackson and Kath Smith.