Shareholders of JD Sports Fashion plc will note a massive 66% salary increase awarded to the executive chairman (from £423k to £700k) when considering the company’s remuneration report. Additionally, the remuneration committee is seeking shareholder approval for the chairman’s proposed cash-based long-term incentive award with a face value of £3.5m. The vesting conditions are based on profits before tax and measure performance over three separate one year periods.

The company has a ‘normal’ bonus maximum equivalent to 100% of salary, however the remuneration committee has the discretion to override this cap and has done so during the year, awarding bonuses equivalent to 120% of salary. Manifest highlights significant concerns as to the overall remuneration structure, noting that all performance incentives are driven by earnings and settled entirely in cash.

All directors are standing for re-election in line with the recommendations of the UK Code of Corporate Governance. Shareholders will note that only one demonstrably independent director currently sits on the board, and neither the chairman nor the senior non-executive director are without independence concerns. The board consists of three executives (including the chairman) and three non-executive directors, two of which are considered independent by the company, however Manifest has highlighted a tenure issue regarding the senior non-executive director and therefore considers only one non-executive director to be independent for the purposes of the Combined Code.

Any minority shareholder dissent toward these issues will be effectively muted by the company’s shareholding structure, however. Pentland Group plc is the company’s controlling shareholder, and has already pledged to back the chairman’s £3.5m long-term incentive award.

 

 

Company	FTSE Index	Event Date	Event Type	Voting Issues	Proxy Deadline
African Mining & Exploration	AIM	17 Jun 11	AGM	C D	15 Jun 11
Headlam Group	SmallCap	17 Jun 11	AGM		15 Jun 11
Tarsus Group	SmallCap	17 Jun 11	AGM	C E I	15 Jun 11
BH Global Ltd	FTSE 250	20 Jun 11	AGM		17 Jun 11
BH Macro Ltd	FTSE 250	20 Jun 11	AGM		17 Jun 11
Heritage Oil	FTSE 250	20 Jun 11	AGM	C I	17 Jun 11
IGas Energy	AIM	20 Jun 11	AGM	C	16 Jun 11
Borders & Southern Petroleum	AIM	21 Jun 11	AGM	C	17 Jun 11
Hambledon Mining	AIM	21 Jun 11	AGM		17 Jun 11
Whitbread	FTSE 100	21 Jun 11	AGM		17 Jun 11
Anglo-Eastern Plantations	SmallCap	22 Jun 11	AGM		20 Jun 11
Braemar Shipping Services	SmallCap	22 Jun 11	AGM	C I	20 Jun 11
Cosalt	Fledgling	22 Jun 11	AGM	C D I	20 Jun 11
Eastern European Trust	SmallCap	22 Jun 11	AGM		20 Jun 11
Petroneft Resources	AIM	22 Jun 11	AGM	C	20 Jun 11
Renewable Energy Holdings	AIM	22 Jun 11	AGM	C	20 Jun 11
JD Sports Fashion	FTSE 250	23 Jun 11	AGM	C I	21 Jun 11
Ludorum	AIM	23 Jun 11	AGM	C	21 Jun 11
Soco International	FTSE 250	23 Jun 11	AGM	C H I	21 Jun 11

Key:

A: A qualified audit opinion has been issued by the auditors B: Fundamental uncertainties highlighted by auditors C: Audit committee not considered entirely independent D: The non-audit fee is more than 200pc of the audit fee E: The company’s dividend was not covered F: No environmental report or statement contained G: The company has a joint chair/CEO H: The company has not appointed a SNED/SID I: Less than 50% of the board (exc Chair) are independent (large/med cos) J: The board contains fewer than three NEDs (large/med cos) K: There is no nomination committee L: The remuneration committee is not considered to be entirely independent

M: A director’s notice period >12 months fixed/rolling N: Some options/awards may be granted without reference to performance O: Share scheme does not contain an overall 10% dilution limit in ten years P: Share scheme allows for retesting of the performance condition Q: A proposed incentive scheme has maximum annual participation limits of over 100% of salary (face value basis) R: A proposed incentive scheme allows for preferential vesting of awards in the event of a change of control S: A shareholder resolution has been proposed.

Last Updated: 19 June 2011