Playtech’s Boss Bonus Scheme Could Trigger New Shareholder Revolt

Gambling technology company Playtech faces shareholder revolt over its boss, Mor Weizer, recently revealed long-term bonus prize.

The company said earlier this month that the new incentive programme was already backed by major investors. Nevertheless, it is known that the proposal is being opposed by two shareholder advisory firms.

If certain share price goals are met, the newly proposed incentive plan could see the CEO of Playtech obtaining company stock worth up to £ 30.4 million. Playtech investors are set to vote on the new policy at a meeting of stakeholders on December 19.

Playtech’s new bonus plan offers a zero value option reward of 1.9 million shares that will be paid out in tranches if the stock price of the firm retains those rates for a span of 30 days.

If shares recover to more than 600p, the first tranche will be triggered. When stocks skyrocket to 700p, the second tranche will be known, and the third when stock price transactions exceed 800p. The incentive reward is set at £ 16 a share if Playtech’s stock retain at least a month’s value of over 800p.

In the summer of 2017, the company’s shares rocked past £ 10, before tumbling significantly over the past two years on several profit warnings issues.

Earlier this month, Playtech said institutional investors, including Odey Asset Management and Paulson & Co, have already expressed support for their newly proposed reward scheme.

Shareholder advisory service providers Institutional Investors Services and Glass Lewis, however, have advised investors to oppose Mr. Weizer’s share reward proposal in the upcoming vote.

The new uprising announced by Playtech shareholders over the compensation of the company leader would be a revolt this coming Thursday. The gambling solutions provider was hit by a revolt over the remuneration package of its boss during its Annual General Meeting in May.

Approximately 41.8% of the shareholders of the company opposed its new remuneration plan and 40.9% voted against its remuneration policy. In 2018, the company’s planned executive pay was backed by only 40.6 percent of investors.

Glass Lewis said they had “strong reservations regarding the terms of the awards, whereby the CEO may be eligible for extremely large payouts based solely on share price performance, which may primarily reflect market forces rather than company or management performance.”  The advisory firm added that Mr. Weizer’s £ 30.4 million reward was unreasonable relative to the pay receivable.

Institutional Shareholder Services said it was “quite indicative of the poor remuneration governance at the board that six months after putting forward a remuneration policy proposal, the company is seeking to make a one-off arrangement outside the existing framework.”  Royal London Asset Management, which owns a 0.5% stake in Playtech, said it would vote against the new bonus scheme as it “offers significant sums to the CEO for meeting share price targets below where Playtech’s shares traded ahead of their profit warning in July last year.”