JD Sports could be subject to an investor backlash after awarding its boss a £4.3m bonus despite receiving millions of pounds in Covid support.
Shareholder advisory group Glass Lewis has urged investors to vote against the “inappropriate” pay policy after executive chairman Peter Cowgill’s total pay reached nearly £5m despite a short-term salary reduction.
JD Sports said its pay policy reflected the group’s “sustained outstanding performance”.
A spokesperson for the sportswear firm said: “The posting of exceptional results during such a challenging climate demonstrates that the remuneration approach and steps taken throughout the pandemic continue to support and drive this performance.”
The company will hold its annual general meeting on 1 July when shareholders will vote on the company’s remuneration report.
Glass Lewis is also recommending that shareholders vote against the re-election of Cowgill because of what it claims is inadequate succession planning.
Cowgill was given a special award of £6m for his performance in 2019, which was to be paid in instalments. It was included in his bonus figure for last year.
Before the pandemic JD Sports had already paid out £3m; then delayed a £1.5m payment that was due in October 2020. This has now been paid to him.
The company said in its annual report: “In the light of developments caused by the Covid-19 pandemic, it was agreed that the remaining payments would be deferred and paid when the board and committee were satisfied it is appropriate to do so.”
Cowgill reduced his basic salary by 75% between April and August 2020, after which it returned to normal levels.
The chain has received £61m through the UK furlough scheme and an estimated £38m in business rates relief during the pandemic so far and an additional £25m in wage support from other countries where it operates, including the US.
The Bank of England’s Covid Corporate Financing Facility Scheme, which was set up to help larger firms through the pandemic, also granted JD Sports a £300m loan. This had not been used by the time the scheme closed in March.
Online sales growth during lockdowns has seen revenue grow by 0.9% to £6.1bn across the firm, which also has outlets in Europe, the US and Asia Pacific. However, pre-tax profit fell by 7% to £324m.