JD Sports on the Brink of Shareholder Rebellion

JD Sports stock at 2nd highest point in 5 years, but advisors want the CEO out and his pay curtailed.

Being a good sport is all part of corporate leadership, and in the case of one of Britain’s largest high street retail chains, sportsmanship goes beyond the boardroom.

JD Sports Fashion PLC, headquartered in Bury, Greater Manchester, is a household name with retail shops in every high street and every mall across the United Kingdom, and has been publicly listed on the London Stock Exchange since 1996.

The company’s stock prices have been rising steadily until reaching the highest point for 5 years on April 16 this year, and have remained steady since, however today there has been a slight decline by 1.6 points (0.17%) today.

Big deal, you may say…

It may not seem like such a move, and the company’s share price is still at a relatively high position when looking at its performance over a five year period, however there is now a very important factor to bear in mind.

Today, majority shareholders have begun to revolt against what they consider to be inappropriate bonuses that have been granted to JD Sports chairman Peter Cowgill.

Mr Cowgill was paid over £4.3 million in bonuses in the last financial year, which made his total remuneration package up to over £5 million if his salary is also taken into consideration, despite having received a salary cut of 75% for a few months during that accounting period.

Independent provider of global governance services Glass Lewis has advised that major shareholders in JD Sports should vote against the company’s pay policy.

Mr Cowgill was entitled to this gargantuan bonus as a result of a remuneration package that was signed off by the company two years ago for what the firm describes as ‘exceptional past performance’ however the external advisors to shareholders have stated their position in that this should be contested, especially given the massive £86 million in furlough payments JD Sports has received from the government.

What’s more, Glass Lewis has attacked Mr Cowgill indirectly, as it is not just his pay packet the advisory firm disapproves of, but also Mr Cowgill’s suitability as CEO by implying that shareholders should vote him off the board when he is due for re-election in three weeks time.

This is not yet a shareholder rebellion, however that is exactly what is being encouraged, and if it occurs it will be yet another in a long line of such activity that has been virulent over the past few months among top London Stock Exchange listed companies.