Sports retailer JD Sports Fashion (JD.) has sought to draw a line under the acrimonious departure of its former boss Peter Cowgill as it agreed terms on a £5.5 million pay package.
Cowgill will get £3.5 million in return for not joining or advising any rivals for a two-year period or taking any key staff from JD, and he will receive a further £2 million for providing consulting services to the new leadership team over three years.
After quitting as finance director in 2001 - Cowgill took the helm at JD three years later and was responsible for a significant turnaround in its fortunes.
JD agreed to buy its smaller rival Footasylum for £90 million but at the behest of competition authorities was forced to sell the business to a German asset manager for £39 million.
The fall-out from the affair, which included a £5 million fine for the company after Cowgill met his counterpart at Footasylum in a car park while the deal was being probed, saw JD push to split the chair and CEO functions, effectively both held by Cowgill as executive chair, and was reportedly the catalyst for his resignation in May 2022.
REMOVING A POTENTIAL DISTRACTION
JD has subsequently brought in Andy Higginson, an alumni of Tesco (TSCO), Unilever (ULVR) and Laura Ashley, as chair and former Kingfisher (KGF) executive Regis Schultz as CEO.
Shore Capital analyst Eleonora Dani commented: While these arrangements might draw some comments today, in our minds, they effectively remove a potential distraction for the board and its new CEO, so permitting a total focus on the commercial issues and opportunities at hand; Cowgill’s three-year commitment prevents the challenges of any competing activity he may wish to have pursued and permits the new CEO and board to have ongoing engagement with the executive that did most to build JD.
‘Specifically, the agreements potentially retain the person with key relationships with the major brand owners within its fold.’
