Sports Direct investors are making their dissatisfaction with the retailer known, with major shareholders rebelling despite the company's promises to reform.
And the company's share price reflected this ire, with the stock closing down by 8.5 per cent, having dipped by as much as 10 per cent earlier in the day.
7 September 2016 @ 3:45pmSports Direct Intl (SPD)
Sports Direct's investors voted against the re-election of Keith Hellawell as chairman of the board, in what the Trade Union Share Owners described as a "record-breaking shareholder uprising". The group said shareholder support for its resolution to commission an independent review of the company's human capital management strategy was "the highest on record for an employment-related resolution in the UK", with 20.66 per cent of the vote.
“Today’s shareholder uprising should act as a cautionary tale to other employers," said TUSO chair Janet Williamson.
"Sports Direct’s reputation has been dragged through the mud and its share price has taken a hammering.
"The company must now commit to holding a genuinely independent investigation into how the company treats its workers. Without wholesale changes to working conditions, Sports Direct risks finding itself back in the dock."
She added: “Hopefully this vote will usher in a new era of investors working with unions to challenge bad employment practices.”
Meanwhile, Standard Life Investments, which holds 5.8 per cent of Sports Direct's issued share capital, said that it had voted against the company’s remuneration report and against the reappointment of all of the non-executive directors.
The shareholder said that while it appreciated that yesterday's report into shortcomings in Sports Direct's working practices was a "positive step forward", in order to achieve the firm's full potential "a structural change in the way that the company is governed is now required".
"In order for the company’s equity value to reflect its potential, we encourage the board to bold action," Standard Life said.
"We would like to see Mr Ashley with a role, title and responsibilities that reflect his influence as majority shareholder and founder of the business. And we would like to see that pivotal role supported, as well as challenged, by a group of talented and experienced executives.
"It is our opinion that even then, substantial strengthening of the non-executive members of the board will be required, particularly in the crucial role of chairman."
The chairman, Keith Hellawell, offered to resign over the weekend, Sports Direct revealed today - but the company asked him to stay on the board. At the AGM this morning, Hellawell said he would quit next year if he fails to win the backing of investors.