Sports Direct’s chairman has attracted the ire of investors as he refuses to step down from the board despite 53 per cent of shareholders voting against his reappointment as the troubled retailer held its AGM on Wednesday.
Keith Hellawell, backed by Sports Direct’s billionaire majority owner Mike Ashley, says the board has urged him to stay and that he will not step down unless voting at the company’s next AGM, in 2017, matches the revolt seen this week.
But Legal & General Investment Management has called for the chairman to step down immediately.
“Following Sports Direct’s recent report on its own shortcomings, as well as the large independent shareholder vote against the chairman’s re-election, it is clear the Board needs to enact significant change in order to earn back shareholder trust,” director of corporate governance Sacha Sadan said in a statement after the AGM.
“At absolute minimum, we believe the current chairman should step down immediately and an external, independent appointment made to oversee management and protect the interests of all stakeholders – including employees, suppliers, and shareholders.”
This is the third consecutive year LGIM has voted against Sports Direct and it points out that the retailers’ share price fell from £7 to £3.08 at the end of August.
Stock was down 10 per cent on Wednesday morning as the company issued a statement that profits would fall to £300m this year and closed the day at £3.19.
Yesterday, Standard Life Investments issued an open letter to Hellawell saying the company required “structural change” and that it would be voting against key board appointments and the company’s remuneration report.
The Investor Forum, which represents £14.5trn worth of assets, also took the unprecedented step of going public with its concerns about the company in the lead up to the AGM.