The business figures for the past year 2018 look quite good for GVC Holdings. Actually a reason to be happy for the shareholders, who, however, were anything but in a good mood at the company’s last Annual General Meeting. The reason for this, however, is not necessarily the business figures for last year, but above all the bonus payments for CEO Kenny Alexander. He had only received a million bonus last year and this year he is again making a strong clean sweep – too much obviously in the eyes of many shareholders.
42% of shareholders rejected the salary report
A few days ago the annual general meeting took place at the industry giant GVC Holdings. In principle, there was good news to report, as the Group’s business figures look really good again in 2018. However, there is a lot of criticism of CEO Kenny Alexander, who can again look forward to a bonus in the millions. The managing director will receive a whole 19 million pounds as a bonus for the past year 2018 – too much in the eyes of many shareholders. After all, 42 percent of them were against the group’s salary report. 52 percent, however, voted for it and so it was finally adopted. In the run-up to the Annual General Meeting, however, there had already been strong dissenting votes against the bonus payment to Alexander.
The latter reacted to the criticism in the run-up by lowering his salary by around 18 percent. Instead of the 950,000 pounds actually entitled to it the boss will earn in the future thus ?only? approximately 800,000 pounds in the year. However, the shareholders could not really be satisfied by this. And the reasons for the criticism are to be found in the recent past . Many shareholders accuse Alexander of not having always acted in the interests of the company.
Boss sold share packages
In principle, Alexander is contractually entitled to the current premium, as the GVC successfully took over the bookmaker bwin in 2015. The fact that the premium is being paid is obviously not really a thorn in the side of the shareholders, but the fact that it is again such a high premium payment. Already one year earlier Alexander, together with another top manager of the group, was able to enjoy a bonus of around 67 million pounds . Alone a share package for Alexander is to have had a value of approximately 45 million pounds. And exactly that became in the further process the problem. First once the value of the share package provided with many shareholders for displeasure, in addition, at the same time in addition, the behavior of the boss. This did not keep all shares, but decided for a sale of shares in the value of approximately 20 million pounds . On the one hand not a good signal to the shareholders, on the other hand this large-scale sale also had a direct effect on the stock market price and so the stock market price collapsed in the meantime by up to 25 percent.
A company-supporting behaviour cannot necessarily be talked about here, even if the stock market prices have risen again in the meantime. Nevertheless, the stock is not at the level of the time before the sale. The fact that the boss now also still a bonus in nearly the same height draws in, cannot understand many investors.
GVC already reacted
For example, the investor Richard Buxton, who holds a not insignificant proportion of GVC company shares with the company Merian Global Investors, found clear words. He explained that it was of utmost importance that the bonus payments only reward the management for a good performance again when the trust could be regained, which was gambled away last year. However, as the gambling giant also wants to avoid future disputes with its shareholders, the company has already reacted quickly and announced that a significantly lower bonus level will be set in the business rules from 2019. This means that there will no longer be any bonus payments to the same extent as before. How the shareholders will react to this change is not yet known.
Good for Alexander and the GVC in this context, however, is that the business figures for 2018 are also correct. Thus, the Group was able to increase its profit compared to 2017 by a full nine percent and currently stands at a total of around 3.6 billion pounds. Online gaming, in which GVC can report a growth spurt of 19 percent, recorded particularly strong growth. However, it is becoming problematic on the stationary market at home. The British Gambling Commission recently passed a law restricting gaming at the so-called Fixed Odds Betting Terminals. Players have so far been able to bet up to 100 pounds per round , in future only a maximum of two pounds per round will be possible. The GVC is facing losses in turnover in the millions, at the same time numerous betting shops of the group have to close. That displeases the investors naturally, at the same time the company presented so far in addition, still no alternative, with which one would like to make up for the losses with the conversion.
Great hopes in Las Vegas and the USA
A possible solution looks for the gambling giant up-to-date completely obviously in the USA. Here before few months the gambling law was clearly loosened and the GVC Holdings could announce few days ago the receipt of one Glücksspiel-Lizenz from the federal state Nevada. Although this is only valid for two years, it represents an important step back to the US market for the British stock corporation. Here was one already once with the mark partypoker active , had itself at that time due to the Unlawful Internet Gambling Enforcement Acts however again from the market retreat. Rumors say that one stands with partypoker already for some weeks in the starting holes and prepares itself for a return.
In connection stands the assignment of the license from Nevada however above all with the partnership with the US enterprise of the MGM Resorts. Both companies together laced a package of approximately 200 million US Dollar and hereby the enterprise “Roar digital” brought into being . In the future one would like to dominate with this not less, than the sport betting market in the USA. If this plan works out, the revenue losses from the fixed odds betting terminals could be compensated here – a plan that should also appeal to the tense shareholders.