Sports Direct has been given a bloody nose by shareholders over pay and the future of its chairman, at a stormy annual meeting.
More than half of the company’s independent shareholders who voted were against its pay policy, while almost a third refused to back the re-election of Keith Hellawell as chairman.
Sports Direct, led by founder, Mike Ashley, has faced heavy criticism from the City and trade unions over corporate governance failings and the treatment of its workers.
City institutions including Royal London Asset Management have criticised the company for lowering the performance targets in its bonus scheme, failing to hire a new finance director for 18 months and buying stakes in rival retailers such as Tesco and Debenhams. The Investment Management Association issued a red-top alert ahead of the meeting.
Excluding Ashley, 50.3% of shareholders voted against Sports Direct’s remuneration, while 23.7% voted against Hellawell and, including abstentions, 30.5% refused to back the chairman.
However, the support of Ashley, who owns 55% of Sports Direct, meant both resolutions were passed at the meeting. There were also significant rebellions against the re-election of Sports Direct’s other non-executive directors and the reappointment of Grant Thornton as auditors.
Ashley and the Sports Direct board faced heavy questioning from shareholders at the meeting. Representatives from ShareAction, the pressure group, claimed the company’s workers are “risking their health” for fear of being dismissed.
A representative of Hargreaves Lansdown said Sports Direct’s reputation as an employer was “atrocious” and asked Hellawell why he had not resigned.