JD Sports is facing investor criticism after its executive chairman was awarded a £4.3 million bonus despite the organisation receiving millions of pounds in Covid-19 (Coronavirus) support.
According to the sports fashion retailer, Peter Cowgill's total pay, including a short-term 75% salary reduction between April and August last year, reached nearly £5 million.
Shareholder advisory group Glass Lewis has urged investors to vote against what it called an “inappropriate” pay policy, saying JD Sports should have substantially reduced or scrapped its bonus awards.
JD Sports defended the bonus however, saying it reflected the group's “sustained outstanding performance.”
“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,” it said.
During the pandemic, JD Sports received £61 million through the UK furlough scheme and an estimated £38 million in business rates relief. The organisation also benefitted from an additional £25 million in wage support from other countries where it operates, including the US.
In addition, JD Sports was granted a £300 million loan through the Bank of England's Covid Corporate Financing Facility Scheme, which was set up to help larger firms through the pandemic. The company said it had not used any of the loan by the time the scheme closed in March.
On the subject of delaying Cowgill’s bonus payments for last year, JD Sports 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.”
Glass Lewis also said shareholders should oppose Cowgill’s re-election due to inadequate succession planning and a lack of progress on boardroom gender diversity. Shareholders can cast their votes at the organisation's 1 July annual meeting.
