Succession plan criticized as “messy”
Macau casino operator SJM Holdings has announced that Chairman Stanley Ho, 96, will step down from his leadership role at the company’s annual general meeting on June 12. At that time, he will become chairman emeritus and his daughter Daisy Ho will be appointed chairman and executive director.
Daisy Ho joined the SJM board in June 2017, GGRAsia reports. She served previously as a director at MGM Grand Paradise Ltd., the gaming license-holder for MGM China. She stepped down from that role at the end of 2010, according to media reports.
According to Inside Asian Gaming, Angela Leong, Ho’s fourth consort and mother of his youngest children, will be made co-chairwoman and remain an executive director. Current board member Timothy Fok Tsun Ting will become co-chairman. Ambrose So will be promoted to vice chairman, executive director and CEO. Stanley Ho’s third wife Ina Chan has been recommended by the board for election as an executive director.
Bernstein analysts Vitaly Umansky, Zhen Gong and Cathy Huang say the game of musical chairs will change little at SJM, as “the entrenchment of existing management and governance continues.
“Any major management/governance changes at the company are unlikely to materialize in the foreseeable future,” the analysts said, pointing to news that former Melco Resorts COO Ted Chan was hired away by Galaxy Entertainment Group as its new COO for Japan development. It has been rumored that Chan was approached by SJM.
“With Galaxy’s hiring of Ted Chan, the hiring of a top-notch operator has been missed,” the Bernstein team noted. “We see no real positive changes to management that could turn the company in the right direction.”
JP Morgan’s DS Kim has described the new board structure as “a bit messy, with too many interested parties.”
Kim said JP Morgan “hoped to see a clearer succession plan (a single chairperson would have been a good start), which in turn would enable the company to fine-tune the management team and structure before the opening of Grand Lisboa Palace next year. This complicated structure, in our view, leaves room for a potential power tussle within the board, given the lack of clear control.”
SJM will be the last of Macau’s Big 6 casino concessionaires to open an integrated resort in the Cotai district when its HK$36 billion (US$4.6 billion) Grand Lisboa Palace launches in 2019 or 2020.
The SJM board expressed “its sincere gratitude to Dr. Ho for his invaluable contributions in building a solid foundation for the company’s continuing growth in the future.” One of Asia’s richest men, Ho has been in retirement since reportedly suffering a fall at home in Hong Kong in 2009.
Brokerage Sanford C. Bernstein Ltd said in a note, “Instead of using Stanley Ho’s retirement as an impetus to make governance and management changes, the company has opted to further entrench the status quo.” It also said Galaxy’s hiring of Chan “removes a key potential executive hire that had been the subject of market talk.”
“If Chan had been hired and empowered by SJM, he could have been a key driver in transforming the company. Instead his talents will now benefit Galaxy.”
