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JD Sports 'disappointed' nearly third of shareholders opposed pay report
29th Jan 2021 11:43
(Sharecast News) - JD Sports Fashion said it was "disappointed" that nearly a third of its shareholders had voted against its remuneration report at the annual meeting in July.
The retailer noted that while all resolutions were duly passed with the requisite majority, 31.1% of shareholders voted against the directors' remuneration report, while 29.7% voted against the long-term incentive plan.
Under the UK Corporate Governance Code, when 20% or more votes are cast against a resolution, a company is required to explain what action it plans to take and provide further updates on the issue within six months and in the annual report.
JD said on Friday that the main concern about the long-term incentive plan was regarding the cash-based nature of the scheme. The complex nature of the cash scheme was also deemed "problematic" by shareholders, it added.
There was also a number of concerns raised about the bonus arrangements for executive directors, and in particular, the fact that there could be greater transparency regarding bonus targets and metrics.
"Whilst we intend to increase the level of transparency regarding the bonus targets and metrics as part of our remuneration review this year, the board remains of the view that it is appropriate to disclose the specific financial targets on a retrospective basis only, as this information is commercially sensitive," the company said. "However, we will consider whether it is appropriate to include other targets which can be disclosed on a forward-looking basis as part of our wider remuneration review this year."
JD pointed to the fact that at both the 2019 and 2020 annual meetings, more than 20% of shareholders voted against the remuneration report.
"The board and the Remuneration Committee are disappointed by this result in consecutive years. Accordingly, the remuneration committee Chair has specifically instructed that we carry out a wide ranging review of our remuneration practices this year...and to increase the level of engagement on these issues still further with our shareholders and key stakeholders."
Earlier this week, JD Sports confirmed it was considering an equity raising as it looks to pursue further acquisitions.
The retailer noted that while all resolutions were duly passed with the requisite majority, 31.1% of shareholders voted against the directors' remuneration report, while 29.7% voted against the long-term incentive plan.
Under the UK Corporate Governance Code, when 20% or more votes are cast against a resolution, a company is required to explain what action it plans to take and provide further updates on the issue within six months and in the annual report.
JD said on Friday that the main concern about the long-term incentive plan was regarding the cash-based nature of the scheme. The complex nature of the cash scheme was also deemed "problematic" by shareholders, it added.
There was also a number of concerns raised about the bonus arrangements for executive directors, and in particular, the fact that there could be greater transparency regarding bonus targets and metrics.
"Whilst we intend to increase the level of transparency regarding the bonus targets and metrics as part of our remuneration review this year, the board remains of the view that it is appropriate to disclose the specific financial targets on a retrospective basis only, as this information is commercially sensitive," the company said. "However, we will consider whether it is appropriate to include other targets which can be disclosed on a forward-looking basis as part of our wider remuneration review this year."
JD pointed to the fact that at both the 2019 and 2020 annual meetings, more than 20% of shareholders voted against the remuneration report.
"The board and the Remuneration Committee are disappointed by this result in consecutive years. Accordingly, the remuneration committee Chair has specifically instructed that we carry out a wide ranging review of our remuneration practices this year...and to increase the level of engagement on these issues still further with our shareholders and key stakeholders."
Earlier this week, JD Sports confirmed it was considering an equity raising as it looks to pursue further acquisitions.