An article in the Racing Post on the topic of Betfair's bonuses to management despite the company's poor performance since flotation has apparently been pulled. Anyone who might suggest that Betfair had some influence on this decision should be ashamed. Betfair's advertising money would have no influence on editorial decisions.
Betfair faces the risk of a showdown with its new shareholders after a leading UK investors' organisation raised concerns about potential bonuses on offer to executives at the troubled gambling group. The Association of British Insurers has published a so-called "amber-top" alert to shareholders of the FTSE 250 company, which is reeling from a 46% fall in its share price since its listing in October.
The report by the ABI – whose members account for almost 15% of investments in the London stock market – has highlighted the group's long term incentive plan (LTIP), because the targets that Betfair executives will need to hit to gain future awards are not defined in the company's annual report.
It has also raised the issue of one-off bonus payments made to executives last year, while acknowledging that the windfalls were disclosed in Betfair's flotation prospectus.
Despite the poor share performance since flotation, it emerged in July that the total pay of chief executive David Yu had risen by 125% last year to £824,676, while finance director Stephen Morana had taken a 445% hike to earn £1.6m.
A spokesman for Betfair said: "The company is still in discussions with the ABI. This is still a draft recommendation." Betfair also pointed out that the amber-top warning concerns the LTIP and not the one-off payments.
In July, Betfair's first annual report revealed that the total amounts paid to Yu and Morana last year were inflated by the so-called "senior executives' incentive plan" (SEIP), under which Yu received an extra £300,000 and Morana £1.2m. The report stated: "The 2010 SEIP granted certain senior employees and executive directors one-off conditional awards consisting of a cash amount and an award of nil-cost options on admission to the stock exchange."
Betfair's annual meeting is scheduled for 22 September, although it is unlikely that it will see a massive vote by investors against the company's remuneration policy: despite October's float, founders Ed Wray and Andrew Black still own around 21% of the shares, while long-term shareholders Softbank and Charlton Acquisition hold around 11% and 10% respectively.
On Tuesday, the company said its second quarter had started strongly, following an expected drop in its first-quarter revenue when it faced a tough comparative period that included last year's football World Cup. The group added it was comfortable with estimates for the full year of revenues of about £346m from the company's core business and £390m in total sales.
No comments:
Post a Comment