JD Sports chief defends his £4.3m bonus as rising profits push shares to record high
The JD Sports boss defended his controversial £4.3 million bonus as rising profits sent shares soaring to an all-time high.
Peter Cowgill said the “numbers speak for themselves” and claimed the row over his payout was “exaggerated”.
The 68-year-old received £5million last year, including £4.3million in bonuses, even after a 75 percent voluntary pay cut.
Bonus dispute: JD Sports boss Peter Cowgill said the ‘numbers speak for themselves’ and claimed the row over his £4.3m payout was ‘exaggerated’
Critics said the executive chairman should not have received the money after JD received £100 million in government aid during the Covid-19 crisis.
But Cowgill, pictured, insisted that the company’s astonishing performance – a £300m increase in profits from even pre-pandemic levels – justified the payoff.
He told the Mail: ‘That bonus payment was excessive as it had been from 2017 to 2019 and I had postponed it to show leadership from the front even though it was too late. I think? [the reaction] been exaggerated?
‘Profit has increased by £300 million, so I’ll let you draw your own conclusions.
‘I had an LTIP [bonus] in eight years. So how do I feel? A bit hard done by, to be honest. I have not noticed that the institutional shareholders object to that.’ His comments came when JD reported half-year sales of £3.9bn.
This helped JD achieve a record profit of £364.6 million, and it predicts an unprecedented £750 million for the full year. That’s more than a previous forecast of £550 million.
The update sent stocks 9.7 percent, or 102p, to 1151p. That valued it at £11.87 billion – more than High Street rivals including Next and Marks & Spencer.
JD’s huge earnings will raise eyebrows, however, given the decision so far not to return millions of pounds received from the government during the pandemic.
The bosses insist they will decide by the end of the year whether to return their leave pay, with Cowgill claiming several challenges remain, such as a possible Covid-19 flare-up over the winter and supply chain problems.
But he said first half sales and profits were “extremely encouraging.” JD won big in the pandemic by ramping up capacity in its warehouses to cash in on the move to online shopping.
And when the stores reopened in April, people were queuing outside.
Tracksuits, sneakers and casual sportswear proved very popular during the pandemic as people spent more time at home.
This pent-up demand caused like-for-like sales at JD’s stores in April and May to be 30 percent higher than in 2019, though they fell again in June and July.
It was also boosted by the leave scheme and the relief of corporate rates in the UK, and incentive checks worth £1440 per person in the US, where it has been expanded through the purchase of Finish Line and DLTR.
That pushed sales up from £2.5 billion to £3.9 billion in the 26 weeks to July 31, with profits rising from £41.5 million to £364.6 million.
Russ Mold, investment director at AJ Bell, said, “What JD has accomplished in the last decade or more is remarkable.
“It’s been razor sharp in its focus on its customers, delivering what they want, when they want it and how they want it.”