The gambling company that owns Ladbrokes Coral and Foxy Bingo faces a bruising shareholder rebellion over the “excessively disproportionate” £67m paid to two of its bosses.
GVC, a FTSE 250 company with its headquarters on the Isle of Man but mainly operating from Gibraltar, has awarded its chief executive, Kenny Alexander, £45m in share options since 2016. The chairman, Larry Feldman, has picked up share options worth another £22.5m, thanks to a scheme linked to the firm’s share price, which hit an all-time high of £10.26 last week.
The shareholder advice bodies Pirc and Glass Lewis are advising investors to vote against the pay report at the company’s annual meeting in Gibraltar next week. 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 thinktank the High Pay Centre, said it was outrageous that GVC had continued to award huge pay packets after more than 45% of investors failed to support the company’s pay policy at its AGM last year. The protest vote came in response to Alexander’s total pay hitting £19.4m for 2016, slightly more than the £18m he received in the company’s most recent remuneration report.
“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, Hildyard pointed out that such votes are only advisory in nature, with investors only entitled to a vote on company pay policies once every three years.
“This case demonstrates that even when shareholders do oppose egregious awards, which doesn’t happen often enough, the company doesn’t have to do anything about it.”
GVC shareholders notionally waved through the payouts because they were included in the terms of its £3.2bn takeover of Ladbrokes Coral last year, which won overwhelming support from investors.
Similar huge pay deals have sparked shareholder and political anger in recent months. Jeff Fairburn, the chief executive of housebuilder Persimmon, gave back more than £25m of his £100m-plus bonus after widespread anger and protest. Shareholders also rebelled against the £42m given to the four directors of Melrose, the buyout firm that snapped up the historic engineering company GKN.
While investor discontent about lavish pay awards is yet to reach the heights of the so-called Shareholder Spring of 2012, investors have also lodged sizeable protests at Unilever, Direct Line and Inmarsat.
The GVC annual meeting on 6 June offers a fresh opportunity for disgruntled investors to register their disapproval of the company’s decision to continue awarding uncapped pay deals.
The firm is thought to have stressed to shareholders that they have seen the value of their shares grow hugely under the stewardship of Alexander and Feldman, reaching a record high of £10.15 last week.
GVC declined to comment on the pay deals.
