1st Jul 2021 17:44
(Alliance News) - JD Sports Fashion PLC said Non-Executive Director Andrew Leslie will step down from the board after failing to receive enough support from shareholders at Thursday's annual general meeting.
The athleisurewear retailer noted that, except the independent shareholder vote on resolution 6 - being the resolution to re-elect Leslie - all resolutions were passed at Thursday's AGM with the requisite majority.
"The board recognises that the resolution to re-elect Andrew Leslie has not received a requisite majority of the independent shareholders. Accordingly, Andrew Leslie will step down from the board with immediate effect," said JD.
The firm will now start a search for Leslie's successor in his role as non-executive director and remuneration committee chair.
It also noted "lower levels" of support for the remuneration report and the remuneration policy.
"The remuneration committee is, however, pleased that the resolutions regarding the new share based LTIP (83.43% of the vote in favour) and the new remuneration policy (79.99% of the vote in favour) received considerably more support than the previous LTIP and remuneration policy at the AGM in 2020," the firm said.
JD said it has spent significant time engaging with shareholders and many are "encouraged" by the progress made with remuneration during the past year.
"On behalf of the board, I would like to thank Andrew for his valued contribution to the company, during a period which has seen significant growth and international development," said Executive Chair Peter Cowgill, who earlier on Thursday unveiled plans to divide the current role of executive chair and chief executive.
Shares in JD Sports closed up 5.0% at 964.78 pence in London on Thursday.
The Manchester-based athletic apparel retailer bowed to shareholder pressure over its corporate governance, agreeing to split its chair and CEO roles. Cowgill has served as both executive chair and CEO of JD Sports, since taking up the latter position in 2014.
Last month, JD had defiantly responded to a media report about the dual role of Cowgill, saying it would not split the CEO role from that of chair.
Turning on Thursday to recent trading, JD Sports said sales in the immediate period after the reopening of non-essential shops in England was encouraging in the UK as both existing and new consumers to the company's product ranges. However, consistent with other retailers, it said, store footfall remains fragile with online traffic at elevated levels.
Elsewhere, the retailer said that federal stimulus money paid directly to individuals in the US boosted consumer demand across all of its businesses. Less positively, temporary store closures remained in parts of the Asia Pacific region.
JD Sports also noted it has completed the EUR16.5 million sale of Sports Unlimited Retail BV to its 50% owned Spanish subsidiary, Iberian Sports Retail Group SL. As it noted early last month, JD Sports will continue to make strategic decisions about the future of Sports Unlimited.
Looking ahead, JD Sports said it is on track to deliver pretax profit before exceptional items for the financial year ending in January 2022 at an increased level of "no less than" GBP550 million. It posted pretax profit before exceptional items of GBP421.3 million in financial 2021.
JD Sports said it will divide the roles of executive chair and CEO before its next annual general meeting and a comprehensive process will commence shortly.
The company said the board review will address other governance issues as well.
"We fully accept that the composition of our board should reflect the current scale, momentum and global positioning of the group as well as its increased level of market capitalisation. In addition, the board fully supports the initiatives driven by the Hampton-Alexander Review and the Parker Review and acknowledges the need to create additional diversity within its membership," JD Sports said.
The Hampton-Alexander review focuses on increasing the number of women on FTSE boards. The Parker Review sets FTSE 100 firms a target of appointing one person from an ethnic minority background to their boards by the end of 2021.
"We are also mindful that certain board members have served on the board for longer than the recommended period of tenure within the Corporate Governance Code. The board, therefore, recognises the need to address its composition as soon as possible and have invited the independent non-executive directors to commence the selection process and make recommendations to the Nominations Committee."
By Scarlett Butler; [email protected]; updated by Lucy Heming;Â [email protected]
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