Almost a third of Paddy Power Betfair shareholders vote against pay report
Almost a third of Paddy Power Betfair (PPB) shareholders voted against the company’s executive remuneration report due to concerns around the firm’s bonus scheme.
At its first agm yesterday, 31.8pc of shareholders voted against the resolution, which PPB chairman Gary McCann said related to the treatment of executives’ long-term incentive plans (LTIPs).
“The specific circumstances of the merger posed unique challenges, and therefore the boards made prudent decisions following careful consideration with the primary intention being to retain talent,” he said.
The company’s incentive scheme rewards executives with shares on the condition they meet certain targets.
“Given that the merger was one of equals, it was agreed to have equal treatment of employees of both companies. Therefore, equivalent LTIPs in Paddy Power Betfair were agreed to be put in place for Betfair employees but the time vesting would be in line with the original respective LTIP awards,” Mr McCann said.Not all PPB shareholders had voted at the time of the agm with the official result due later in the day.
Earlier this year the firm suffered a disastrous Cheltenham racing festival, which saw punters pocket £20m (€25.25m).
Despite the initial hit chief executive Breon Corcoran believes sports results will begin to even out in time.
“There’s hundreds of years of bookmaking experience in the combined group, and with all of our experience in the long run we think the sporting results will favour the bookmaker accordingly.
“Although Cheltenham was a difficult start to the year in the long run statistically, we’ve less to worry about,” he said.
The PPB chief said he is pleased with the integration of the two firms so far and that a lot of the “heavy lifting” with regards to redundancies has already been carried out.
The company announced in April it would cut up to 650 staff, including 300 in Ireland. The majority of the roles were high-paying and shed in areas such as technology, human resources, finance, legal, as well as trading and risk.
“As an unfortunate consequence of the merger there have been and will be some redundancies. I think that has been documented and properly communicated, respectably communicated, to our staff and I’m happy that that difficult situation has been managed as well as these things can be,” Mr Corcoran said.
The firm does not expect any further senior departures after former Paddy Power chief executive Andy McCue and chief marketing officer Gavin Thompson announced their intentions to leave.
Paddy Power and Betfair came together in an €8bn deal in early February.
When asked about share price, which has fallen by nearly 16pc since the company’s merged, Mr Corcoran said the company is “doing the right thing for our shareholders and the stakeholders for the group and in the long-term you’d hope the share price takes care of itself”.
The chief executive of the Dublin-headquartered firm said that while there has been significant interest in its own markets about Brexit, the board has decided not to speak publicly about the potential effect it could have on the business.
Mr Corcoran did not outline how much the firm intends to spend on marketing for the Euro 2016 football tournament.
“Obviously part of the way this business competes is on marketing spend. We try to attract and retain customers through a variety of marketing channels and with an event as significant as the Euros coming up in whatever many days, it’s an opportunity for us to showcase our wares.”
PPB also announced its intentions to expand further and that it is continuing to open new shops.