Playtech Faces Shareholder Revolt as Investors Nix 78 Percent CEO Pay Raise
Playtech CEO Mor Weizer faced a shareholder revolt at the company’s annual general meeting on Wednesday as investors trashed a plan to award him a 78 percent pay rise.
Weizer was paid almost £4.2 million ($5.6 million) in 2017, up from £2.3 million ($3.11 million) in 2016, for his “exceptional leadership”, despite the firm issuing a profit warning last November.
But almost 60 percent of shareholders followed the guidance of influential proxy advisory firms Glass Lewis and International Shareholder Services in voting down a remuneration report signing off the one-off pay rise.
Glass Lewis had “questioned the necessity of such a significant award in recognition of ‘exceptional’ ten years of leadership,” suggesting it “views high fixed pay raises with scepticism, as such remuneration is not directly linked to performance and may serve as a crutch when performance has fallen below expectations.”
ISS said that “neither the company’s performance nor the disclosures justify the level of bonuses awarded in the year.”
Pivot to Regulated Markets
Last July, Playtech’s shares were at an all-time high, giving the online gambling giant a market cap of 4.6 billion, but they fell by a quarter after November’s profit warning.
The firm largely blamed the slowdown of growth on the Malaysian government’s crackdown on online gambling operators, which decimated its client base in Malaysia, one of its primary Asian markets.
In response it said it was reorienting its business towards the regulated markets and, last month, announced the $1.05 billion acquisition of Italian gambling giant Snaitech, which it said represented “the continuation of our strategy to invest in leading retail brands in fast growing, regulated markets.”
‘Bad Corporate Governance’
Alan Jackson, chairman of Playtech, told City AM that the board had listened to its shareholders and understood their concerns. “We are committed to working with shareholders to address the issues raised going forward,” he said.
But Jackson himself, along with John Jackson, chairman of the remuneration committee, both received significant votes of no confidence from shareholders, at 35 percent and 43 percent, respectively. This caused Playtech to announce it would “review the composition of its remuneration committee.”
A top-ten shareholder, which spoke to the Financial Times on condition of anonymity, said it had voted against the pay rise and refused to support Alan Jackson because of “bad corporate governance on the board.”
“There are big corporate governance issues surrounding this company,” it added.
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