Playtech’s CEO Bonus Scheme Could Prompt New Shareholder Revolt

Playtech's CEO Bonus Scheme Could Prompt New Shareholder Revolt

Gambling technology giant Playtech faces shareholder revolt over a recently revealed long-term incentive award for its boss, Mor Weizer.

The company said earlier this month that major investors have already backed the proposed bonus policy. However, it is understood that two shareholder advisory firms are urging shareholders to reject the plan.

The newly proposed bonus scheme could see Playtech’s CEO receive company stock worth up to £30.4 million if certain share price targets are met. The new policy is set to be voted by Playtech investors at a December 19 shareholder meeting.

Playtech’s new bonus scheme proposes a nil cost option award of 1.9 million shares that will pay out in tranches if the company’s stock price maintains certain levels for a 30-day period.

The first tranche will be triggered if shares return to above 600p. The second tranche will be realized if shares soar to 700p, and the third if stock price trades above 800p. The bonus award is capped at £16 a share, if Playtech’s shares maintain a price of over 800p for at least a month.

The company’s shares rocketed past £10 in the summer of 2017, before tumbling significantly on several profit warnings issues over the past two years.

Influential Proxy Advisory Firms Urge Investors to Reject the Bonus Scheme

Playtech said earlier this month that institutional shareholders, including Odey Asset Management and Paulson & Co, have already expressed their support for its newly proposed bonus scheme.

However, shareholder advisory service providers Institutional Shareholders Services and Glass Lewis have urged company shareholders to reject the share award plan for Mr. Weizer at the upcoming vote.

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A revolt this coming Thursday would be the latest rebellion declared by Playtech investors over the company Chief’s pay. During its Annual General Meeting in May, the gambling solutions provider was hit by a revolt over its boss’ remuneration package.

About 41.8% of the company’s shareholders rejected its latest remuneration report and 40.9% voted against its remuneration policy. In 2018, only 40.6% of the company’s investors backed its proposed executive pay.

Glass Lewis said that they have “strong reservations regarding the terms of the awards, whereby the CEO may be eligible for extremely large payouts based solely on share price performance, which may primarily reflect market forces rather than company or management performance.”

The advisory firm added that the £30.4 million bonus Mr. Weizer could trouser was excessive compared with the pay received by some of his industry counterparts.

Institutional Shareholder Services said it was “quite indicative of the poor remuneration governance at the board that six months after putting forward a remuneration policy proposal, the company is seeking to make a one-off arrangement outside the existing framework.”

Royal London Asset Management, which holds a 0.5% stake in Playtech, said that it would vote against the new bonus scheme as it “offers significant sums to the CEO for meeting share price targets below where Playtech’s shares traded ahead of their profit warning in July last year.”

Source: Don’t play ball on boss’s bonus scheme, Playtech investors warned by Institutional Shareholder Services and Glass Lewis, The Times

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