GVC Holdings may be facing a shareholder revolt after reports that its CEO and Chairman received more than £67 million in a scheme tied to the firm’s share price, which recently hit an all-time high of £10.26.
According to the UK newspaper the Guardian, the company—which owns Ladbrokes Coral—paid its chief executive, Kenny Alexander, £45m in share options since 2016. Also, board chairman Larry Feldman received share options worth another £22.5m under an arrangement linked to the firm’s share price, which hit an all-time high of £10.26 recently.
Shareholder advice bodies Pirc and Glass Lewis are advising investors to vote against the pay report at the company’s annual meeting in Gibraltar this month. Glass Lewis said Alexander’s pay—which is about 550 times that paid to average employees—was “excessively disproportionate”.
Luke Hildyard, a director of the remuneration think-tank the High Pay Centre, told the paper that the payments come despite 45 percent of investors voting against the company’s pay policy last year.
“Clearly they’ve completely disregarded the strong vote against last year and are continuing with a similar approach to pay,” Hildyard said. “You’d hope that there will be an even stronger vote against this year.”
However, the votes are only advisory, with investors only entitled to a vote on company pay policies once every three years, the paper reported.
The controversy also comes as GVC is dealing with the UK government slashing the maximum bet allowed on fixed odds betting terminals to £2.
In a trading update, GVC Holdings has anticipated that the reduction will see the firm’s Group EBITDA fall by £160 million by the end of 2019. The company also expects a drop of £120 million in Group EBITDA by the end of the year, as well as a general shift in emphasis away from retail betting towards online growth.
“The focus in the UK Retail operation over the last two years has been to create a business that is well placed to face these structural and regulatory headwinds,” the update report said. “As such we expect to be able to reposition the business within two years following implementation, with an anticipated fully mitigated impact of c£120m on Group EBITDA secured by the end of this period.
“In the first full year the impact on Group EBITDA is anticipated to be in the region of £160m. Therefore, we expect to retain a profitable and highly cash generative UK Retail estate. Furthermore, our proven leading multi-channel expertise presents additional opportunities to drive online growth,” the report said.
In other news in the report, the firm’s European retail operation rose by 28 percent due mostly to its Eurobet business, while online net gaming revenue also saw an increase, up 18 percent.
