Investors in troubled British retailer Sports Direct today voted against the re-election of chairman Keith Hellawell as chairman of the board - but he's not in any rush to leave.
Hellawell said he will step down next year if he does not receive the backing of independent shareholders at the 2017 annual general meeting (AGM), after 53 per cent voted to oust him versus the 47 per cent who voted in favour of keeping him as chairman.
"I take this clear message from our independent shareholders seriously, and I will do my best to address their concerns and earn their confidence over the next year," he said, following the vote.
"I have confirmed today that should I not receive the support of a majority of our independent shareholders at next year's AGM, I will step down at that time with immediate effect."
Non-executive director Claire Jenkins said: "Keith's position of being proud to serve and wanting to have the opportunity and support the company...I certainly share that feeling."
Meanwhile, Simon Bentley, senior non-executive director, said: "If there is a sizable proportion of investors that vote in a certain way...nevertheless a sizeable number of investors have taken a different view."
The result comes after several investors and investor advice groups have expressed their worries about Hellawell's position on the board.
Legal & General Investment Management (LGIM), a shareholder in Sports Direct, has already called for Hellawell 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," said LGIM's director of corporate governance, Sacha Sadan.
“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.”
Earlier today Sports Direct said that it told Hellawell to stay on as chair, despite his intention to stand down. In a statement this morning the retailer revealed that Hellawell had offered to step down over the weekend, in light of shortcomings revealed in a report published yesterday. The company asked him to remain "in order to assist with making further improvements".
The independent investors voted to re-elect Simon Bentley, Dave Singleton and Claire Jenkins as directors, although there were sizeable votes against all three, at 36.09 per cent, 34.91 per cent and 34.12 per cent respectively.