Monday 03 September 2018 5:19 pm

Influential advisory group slams Sports Direct and Webuyanycar.com owner ahead of investor meetings

Shareholder advisory group Pirc has published reports recommending investors vote against key proposals at the annual general meetings (AGM) of retailers Sports Direct and Webuyanycar.com owner BCA Marketplace.

Pirc came out strongly against Sports Direct chief executive and 61 per cent shareholder Mike Ashley, recommending that investors vote against his re-appointment.

“His position on the board and level of shareholding raises significant concerns about his influence on the board and whether the other directors can objectively challenge and influence the board’s decision making process,” the report said.

It also notes criticism from the Business, Innovation and Skills select committee which in a 2016 report into working practices at Sports Direct said: "He must be held accountable for some appalling working practices at both the Sports Direct shops and warehouses, either for not knowing about them, or for turning a blind eye to such practices."

Pirc also advises shareholders to vote against the re-appointment of Keith Hellawell as chair.

Hellawell was opposed by 18.3 per cent of shareholders at the 2017 AGM, 47 per cent at the January 2017 extraordinary general meeting and 12.22 per cent at last year’s AGM.

“It is important for the public shareholders to be confident about the board’s ability to represent their best interests and not those of the controlling shareholder. This is no longer the case with the existing chairman and an oppose vote is therefore recommended," Pirc said.

A Sport Direct spokesperson said: "We hope that shareholders will continue to recognise the further positive progress that we have made over the last 12 months."

Pirc has also slammed the remuneration of BCA Marketplace executive chair Avril Palmer-Baunack who has been paid £29.8m by the company for 2018.

“The balance of CEO realised pay with financial performance is not considered acceptable,” the report said.

Her total awards under the scheme is the equivalent of 6,014 per cent of salary which Pirc described as “highly excessive”.

It also criticises the company for allowing Palmer-Baunack to hold the positions of chair and chief executive.

“No one individual should have unfettered powers of decision as the combining the two roles in one person represents a concentration of power that is potentially detrimental to board balance, effective debate, and board appraisal,” Pirc said.

BCA declined to comment to City PM but the Pirc report said BCA had said details of the pay package, which awarded its executive team 10 per cent of any growth realised over the term of the scheme, were set out in its original listing document.