29 January 2021

JD Sports Fashion Plc

Annual General Meeting 2020 - Voting Result Update Statement

JD Sports Fashion Plc ('JD' or the 'Company'), one of the world's leading retailers of sports, fashion and outdoor brands, today provides an update in respect of the voting result from its Annual General Meeting (AGM) held on 31 July 2020. At the Company's AGM, all resolutions were duly passed on a poll with the requisite majority. However, the Board was disappointed with the voting outcome in respect of the following remuneration-related resolutions:

As, in each case, more than 20 per cent. of the votes cast were against the relevant resolution, the Company is providing this update on the views it has received from shareholders on remuneration matters and the actions it has taken, in accordance with Provision 4 of the Financial Reporting Council's UK Corporate Governance Code.

In the period immediately prior to, and since, July's AGM, the Company has engaged with a range of investors (the majority falling within the 'top 40' holders ranked by size of shareholding) and other stakeholders on the business of the meeting. Based on engagement with stewardship teams, governance teams and fund managers in particular, the Company understands that the voting outcome in respect of the remuneration-related resolutions was attributable in part to the matters set out below.

Operation of the Long-Term Incentive Plan 2020

The Company acknowledges that the major concern regarding the LTIP 2020 was in relation to the cash-based nature of the scheme. The complex nature of the cash scheme was also deemed problematic by shareholders.

Bonus arrangements

It is also acknowledged that there were a number of concerns raised regarding the bonus arrangements for the Executive Directors and in particular, the fact that there could be greater transparency regarding bonus targets and metrics.

Cash-based nature of executive director remuneration

Shareholders remain primarily concerned about the "all cash" nature of the Executive Director remuneration. The Company acknowledges that with a cash only scheme, it is more difficult to align Director pay with shareholder interests. For example, it results in there being no post vesting holding period for the LTIP, no minimum shareholding requirement and it also makes malus and clawback provisions less effective. Whilst there are a number of mitigating factors in this regard, such as the significant and self-funded personal shareholding of the Executive Chairman, this is something that the Company recognises as an ongoing concern for shareholders.

Update

Given that the "all cash" nature of Executive pay (including a phantom share scheme which was approved by shareholders last year) was a common theme of concern for shareholders, we are working on incorporating an equity based incentive scheme for our Executive Directors as soon as possible (which we have previously been unable to execute as we did not have the requisite authority from shareholders to allot new shares). Any new scheme will of course be put to shareholders for formal approval at this year's AGM. The Board continually wishes to demonstrate that it is committed to listening to and acting upon shareholder concerns with meaningful change.

Whilst we intend to increase the level of transparency regarding the bonus targets and metrics as part of our remuneration review this year, the Board remains of the view that it is appropriate to disclose the specific financial targets on a retrospective basis only, as this information is commercially sensitive.  However, we will consider whether it is appropriate to include other targets which can be disclosed on a forward-looking basis as part of our wider remuneration review this year.

The Board intends to provide a final summary of the outcome of its engagement on these issues in the Annual Report 2021.

The Company acknowledges that, at both the 2019 and 2020 AGMs, more than 20 per cent. of the votes cast on the resolution to approve the Remuneration Report were against the resolution. The Board and the Remuneration Committee are disappointed by this result in consecutive years. Accordingly, the remuneration committee Chair has specifically instructed that we carry out a wide ranging review of our remuneration practices this year, as detailed in part above, and to increase the level of engagement on these issues still further with our shareholders and key stakeholders.

Enquiries:

JD Sports Fashion Plc                                                                                                                     Tel:  0161 767 1000

Siobhan Mawdsley, JD Group Company Secretary

Jennifer Iveson, Investor Relations

MHP Communications                                                                                                                  Tel:  0203 128 8788

Andrew Jaques

Giles Robinson

Charles Hirst

Catherine Chapman