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Numbers Down But Bwin/Party Boosting Pay

Bwin.Party may not be performing all that well, but its leaders could be in line for significant rewards.
The lacklustre performance of European online gambling group Bwin.Party Digital Entertainment, probably becasue of how they screwed marketing partners,  has paradoxically motivated the Board to suggest boosting the salaries of the executives running the ship.
The Telegraph newspaper reports that an extraordinary general meeting is to be called to approve massive increases in the CEO and CFO salaries because existing share incentive awards have become "worthless" due to the stock sinking more than 40 percent since 2011.
The proposals could see CEO Norbert Teufelberger received up to five-and-a-half-times his base annual salary of GBP 500,000, and CFO Martin Weigold up to 435 percent of his GBP 446,000 annual salary.
In a circular sent to investors last week, the company is seeking approval to introduce the executive rewards, and voting will take place online and at the EGM in Gibraltar on February 24.
The new incentive plan will replace two existing plans established in March 2011, when Bwin Interactive Entertainment merged with Party Gaming, and senior management shares were allocated for issue subject to performance of the share price, which was required to achieve the 202p level before the incentive awards kicked in.
That became a problem as the value of Bwin.Party shares declined 40 percent to around 111p following the 2011 merger.
Things have hardly improved in 2013, with the online gambling group reporting that during the first six months of 2013 online bets more than halved in Germany due to the introduction of a betting tax, and overall the company noted that the number of active daily players fell by 25 percent during the six months ended June 30.
The Bwin.Party board has apparently discussed the plan with 60 percent of its investors and seems confident in getting the proposal approved, but it will need support from more than 75 percent of votes cast at the February meeting to pass the new bonus plan.
The plans of Party Gaming founders Russ DeLeon and Ruth Parasol could also have an impact on the share price. Last October the duo announced that over the next three years they would be selling their combined 14 percent stake in the merged company as part of a divorce settlement.

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