Bury-based FTSE 100 retailer JD Sports Fashion Plc said on Friday it will carry out a wide ranging review of its remuneration practices following shareholder opposition to its executive pay packages at the firm’s AGM last July.
Shareholders voted 32.52% against its remuneration policy, 31.14% against its remuneration report and 29.68% against its long term incentive plan for executives.
Pentland Group, which owns brands including Speedo, Canterbury, Berghaus and Lacoste Chaussures, is a major shareholder of JD Sports with a stake of more than 50%.
“Given that the ‘all cash’ nature of executive pay (including a phantom share scheme which was approved by shareholders last year) was a common theme of concern for shareholders, we are working on incorporating an equity based incentive scheme for our executive directors as soon as possible (which we have previously been unable to execute as we did not have the requisite authority from shareholders to allot new shares),” said JD Sports.
“Any new scheme will of course be put to shareholders for formal approval at this year’s AGM.
“The board continually wishes to demonstrate that it is committed to listening to and acting upon shareholder concerns with meaningful change.
“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.
“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.
“The board intends to provide a final summary of the outcome of its engagement on these issues in the Annual Report 2021.
“The company acknowledges that, at both the 2019 and 2020 AGMs, more than 20 per cent. of the votes cast on the resolution to approve the Remuneration Report were against the resolution.
“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, as detailed in part above, and to increase the level of engagement on these issues still further with our shareholders and key stakeholders.”