11/18/2012 : SPORTINGBET BOSSES IN FOR BIG PAY-OUT
If William Hill bid succeeds, but shareholders not happy
The potential pay out to Sportingbet bosses Andrew McIver and finance director Jim Wilkinson if William Hill succeeds in its GBP 530 million bid to acquire the firm has got tongues wagging.
According to The Telegraph newspaper, the controversial pay-off would see McIver and Wilkinson receive two years' worth of salary, pension payments and bonuses if they leave the company following a sale. Controversial because it is in direct contravention of the UK corporate governance act that stipulates notice or contract periods should be one year or less.
McIver's severance package would be worth GBP 2.4 million working on two years' worth of pension payments and benefits along with the presumption that a maximum bonus is approved. His shares in Sportingbet, currently sitting at 3 million, would give him an additional GBP 1.9 million.
Sportingbet's executive incentive packages have met with resistance from shareholders in the past, when a rebellion of 24.4 percent of its investors voted against a new incentive plan last year.
The group is aware of its contravention of the UK corporate governance act saying: “The contracts were drawn up before the company had obtained a premium listing, at a time when it was not bound by the code. The board does not believe there would be a benefit to shareholders, on balance, in renegotiating the contracts at this time.”
"These contract provisions are well out of line with best practice, which is why we, along with other shareholders, opposed the company’s remuneration report last year. The fact that these provisions could now result in a sizeable payout to directors in the event of being taken over shows why they should have been challenged earlier,” shareholder group Pirc told The Telegraph.