29th Jan 2021 12:16
(Alliance News) - JD Sports Fashion PLC said Friday it is "disappointed" a significant minority of shareholders have shown their anger at the retailer's director remuneration packages.
Over 31% of shareholders voted against the approval of its director's remuneration report, while over 32% voted against the policy itself. In a separate vote, over 29% voted against the approval and adoption of JD Sports Fashion long term incentive plan 2020.
The firm has committed to a "wide ranging review" of its remuneration practices.
"The company acknowledges that the major concern regarding the LTIP 2020 was in relation to the cash-based nature of the scheme. The complex nature of the cash scheme was also deemed problematic by shareholders," JD Sports explained.
It continued: "It is also acknowledged that there were a number of concerns raised regarding the bonus arrangements for the executive directors and in particular, the fact that there could be greater transparency regarding bonus targets and metrics."
JD Sports noted the primarily concerned about the "all cash" nature of the director remuneration.
"The company acknowledges that with a cash only scheme, it is more difficult to align director pay with shareholder interests. For example, it results in there being no post vesting holding period for the LTIP, no minimum shareholding requirement and it also makes malus and clawback provisions less effective," the high-street sports-fashion retailer said.
It added: "Whilst there are a number of mitigating factors in this regard, such as the significant and self-funded personal shareholding of the executive chair, this is something that the company recognises as an ongoing concern for shareholders."
As a result, JD Sports said it is working on incorporating an equity based incentive scheme as soon as possible.
"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," JD Sports added.
Shares in JD Sports Fashion were down 2.0% in London on Friday in midday trade at 763.20 pence each.
By Paul McGowan; [email protected]
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