GVC Shareholders Revolt As Chief Executive Shares £27 Million Windfall

Gaming company GVC has come under fire from its shareholders for its renumeration policies just three months after it completed its multi-billion-pound takeover of Ladbrokes Coral.

GVC Kenneth Alexander.

GVC boss Kenneth Alexander has upset shareholders by taking home a share of £26.9 million in payments last years. (Image: bloombergquint.com)

Following the company’s annual general meeting in Gibraltar on June 6, non-executive board member Peter Isola has stepped down from his post.

During the meeting, shareholders were reportedly left “disappointed” after it emerged how much senior board members had been paid.

Big Payouts Cause Problems for GVC

As outlined in the annual renumeration report, chief executive Kenneth Alexander and non-executive chairman Lee Feldman shared £26.9 million in 2017. Even before the report was published, proxy investor Institutional Shareholder Services (ISS) said GVC’s payouts weren’t “in line with market standards.”

Investors at the meeting agreed with this sentiment, with 44 percent of attendees voting against the current renumeration policies. In addition to voting down the payment scheme, shareholders were opposed to the re-election of Isola as part of the renumeration committee.

Despite Isola leaving the board, the vote was non-binding, which means GVC isn’t bound to change how it pays its senior executives.

“We have sought to balance the views we have heard from shareholders with the clear need to appropriately reward and retain our successful management team,” Jane Anscombe, chairman of GVC’s remuneration committee, told The Telegraph on June 6.

GVC Facing a Battle to Maintain Investor Support

The unrest at GVC comes at a time when it will be looking to make the most of its recent merger with Ladbrokes Coral. With the new entity now worth an estimated £5 billion, GVC is the second largest gaming company in the UK by market capitalisation behind Paddy Power Betfair.

Even with its lofty status, the future is by no means set. With the government cutting the maximum stake per round on fixed odds betting terminals (FOBTs) to £2, gaming brands with a presence on the high street are in for a period of change.

With the average FOBT generating £52,887 in annual revenue when the maximum bet was £100, operators will need to innovate if they’re going to avoid a sharp drop in earnings. Indeed, with Ladbrokes Coral having more than 4,000 betting shops, GVC will have to act fast if it wants to avoid another vote of no confidence from its investors.

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