Investors revolt over executive pay at GVC

GVC Holdings, the owner of Ladbrokes and Coral, said on Wednesday that it was "disappointed" after more than 40% of shareholders voted against its remuneration report, despite its chief executive agreeing to a pay cut.

The company, which held its annual general meeting in Gibraltar earlier, said 42% had voted against the directors’ remuneration report and 58% had backed it.

Jane Anscombe, chair of the remuneration committee, said the committee "notes and is naturally disappointed" with the vote.

She added: "We engaged extensively with shareholders ahead of the annual general meeting and would like to thank them for their helpful and constructive input. We understand that some shareholders ultimately felt unable to support the report, in part due to our legacy arrangements, which going forward no longer form part of our remuneration framework."

Anscombe said the company would engage with investors in the coming months, noting that the remuneration policy was due for renewal at next year’s AGM.

GVC sought to stave off the revolt over excessive executive packages last month, when it announced that chief executive Kenny Alexander had agreed a £150,000 pay cut. That reduced his salary to £800,000, but it did not address wider concerns about the generous long-term incentive plan (LTIP). Alexander’s total pay package in 2018 was £19.1m, compared to £18.3m in 2017.

GVC shareholder Merian Global Investors confirmed it had voted against the report. Richard Buxton, head of UK equities at Merian, said: "While we recognised the reduction in the salary increase that Kenny Alexander has taken following discussion with shareholders, we are concerned by the apparent lack of consistency between the targets under the new LTIP awards and the performance that we, and we understand management as well, expect of the business.

"It is essential that the incentives should only reward management for stretching performance that results in the rerating required to restore the confidence and value lost over the last year."

Pirc and Glass Lewis, the shareholder advisory firms, also recommended investors vote against the report.

The Isle of Man-based owner of online brands such as Foxy Bingo acquired rival betting firm Ladbrokes Coral two years ago in a deal worth around £4bn.

In March, Alexander and chairman Lee Feldman angered investors when they sold £20m worth of stock, causing shares to fall heavily. Shares in GVC were trading a little under 3% higher at 625p by 1315 BST.