Following Saturday’s joint letter by the UK’s top-five retail bookmakers highlighting the introduction of the Association of British Bookmakers’ new responsible gambling code, word comes that the CEO of Ladbrokes has had his executive compensation tied to living up to those noble aims. Sky News reported that Ladbrokes chief exec Richard Glynn wrote a letter to Helen Grant, the UK minister who oversees Gambling, saying Ladbrokes’ board was formalizing “a number of responsible gambling performance measures into senior executives’ remuneration.”
Glynn said a committee would be established to oversee this process, which would take effect “from 2015 at the latest.” While Glynn’s letter suggested that Lads’ customer loyalty program would be of help in identifying problem gambling behavior, Glynn declined to specify how success or failure of this initiative would be determined, nor what specific impacts it would have on execs’ pay packets and whether it would be subject to outside monitoring.
Ladbrokes is prepping the ground for the release of its FY 2013 numbers on Tuesday, which could spell even worse news for Glynn, who has so far failed to revive Ladbrokes’ sagging online performance. Glynn’s efforts have been further complicated by the delayed migration of Lads’ online operations to Playtech’s platform. Various reports have given Glynn until after this summer’s FIFA World Cup to show signs of a significant turnaround or else face the gangplank.
BWIN.PARTY PUSH THROUGH NEW EXEC COMPENSATION SCHEME
Meanwhile, similarly struggling operator Bwin.party digital entertainment managed to push through its new executive compensation program at its EGM on Monday. Earlier this month, Bwin.party announced it planned to change its bonus program for senior management from a system based on the company’s share price to one based on key performance indicators, primarily because the company’s share price has come nowhere near management’s lofty projections before the 2011 merger of Bwin and PartyGaming, meaning execs like CEO Norbert Teufelberger haven’t received the bonuses they’d expected.
Ordinarily, one party’s failure to live up to their end of a bargain doesn’t mean that party should be rewarded. Like the song says, how can you have any pudding if you don’t eat your meat? But this is the world of public markets, where the laws of gravity apparently don’t apply. On Monday, 69.66% of shareholder votes cast approved the new bonus plan, meaning Teufelberger & Co. will get to eat their pudding after all.
However, Rod Perry, chairman of Bwin.party’s remuneration committee, called it “disappointing” that investors holding 30.34% of the company’s shares had voted against the plan. These naysayers included the trusts holding the remaining shares of PartyGaming founders Ruth Parasol DeLeon and James Russell DeLeon as well as SpringOwl Gibraltar Partners B Limited, the ‘activist’ hedge fund that acquired over 6% of Bwin.party’s shares last week. Perry expressed “surprise” at the votes, claiming not to have been informed of the ‘no’ side’s objections in advance of the AGM.
SpringOwl’s ‘no’ vote really shouldn’t have come as much of a surprise, given that the fund is overseen by Ader Investment Management’s Jason Ader, who also serves on the board of casino operator Las Vegas Sands. Ader has a Twitter feed (@JasonAder) that isn’t the most active account, but he did take time out of his Super Bowl Sunday to favorite @CalvinAyre’s tweet of this site’s coverage of the proposed bonus plan. (“With share price targets unattainable, new Bwin.party exec bonuses to reward failure.”) So, yeah, pretty tough to read Ader’s sentiments on that one.