Betfair CEO Breon Corcoran (pictured) has been given a £10m bonus for his role in turning around the online betting exchange.
Betfair recently issued its fiscal 2015 annual report, which revealed that Corcoran’s total pay packet came to £11,627,000, of which £10,064,000 was awarded in long-term incentives. The incentives were established when Corcoran joined Betfair in August 2012 after being lured away from rival Paddy Power.
In order for Corcoran to collect, Betfair’s performance had to exceed specific targets regarding revenue and earnings. Additionally, personal benchmarks included growing business profitability, customer acquisition and developing a “high performance culture.”
Betfair’s performance over the past year has been nothing if not exceptional, and the actual revenue and earnings performance easily exceeded their targets. As a result, Corcoran’s annual bonus came to £953k, or 179.57% of his annual salary.
As for those long-term incentives, Corcoran had received 500k Betfair shares upon signing with the company, which would take effect April 30, 2015, subject to three performance conditions: growth in both earnings and revenue, plus total shareholder return relative to its competitors.
But shortly after signing Corcoran, Betfair says it realized that only the first two conditions had actually been agreed to, and thus – with the approval of 99.83% of shareholders this January – it waived the shareholder return requirement. In the end, it wouldn’t have mattered, as Betfair has been among the most aggressive of UK-listed gaming firms in making it rain for shareholders, increasing its FY 15 dividend by 70%.
CONTEXT IS EVERYTHING
Betfair shares closed out Friday’s trading up 2.4% to £25.87, compared to around £8.25 when Corcoran took over. Last month, Global Betting and Gaming Consultants (GBGC) declared Betfair the biggest publicly traded online-only gambling company, with a market cap of $3.83b, edging out the $3.78b cap of Amaya Gaming, which vaulted into the lead last year following its $4.9b acquisition of the Rational Group, the parent company of PokerStars and Full Tilt.
The rest of GBGC’s public online gambling index ranked as follows: Playtech ($3.75b), Betsson ($2.06b), Unibet ($1.72b), NetEnt ($1.53b), Bwin.party ($1.33b), 888 Holdings ($907m), Zeal Network ($439m) and Bet-at-Home ($270m).
Obviously, with Friday’s sale of Bwin.party to 888 Holdings, the above chart needs some revising. But it’s interesting to note that prior to the 2011 merger of Bwin and PartyGaming, those two companies held a combined market cap of nearly $4b, meaning investors lost two-thirds of their money post-merger. Given those shocking numbers, and the fact that Bwin.party CEO Norbert ‘Titanic’ Teufelberger collected a £1.73m bonus just last year, suddenly Corcoran’s pay packet doesn’t look nearly big enough.
