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Ladbrokes owner GVC makes the running to beat pay revolt

The boss of the UK’s largest gambling company, GVC, which owns Ladbrokes, has announced he’s going to swallow a £150,000 pay cut in the hope it will quell a swelling shareholder rebellion at the firm’s annual meeting on Wednesday.

The only problem is the cut in Kenny Alexander’s basic salary, from £950,000 to £800,000, doesn’t touch the Scot’s long-term incentive plan (LTIP). The mega-bonus scheme bumped up Alexander’s total pay package to £19.1m for 2018, and £18.3m the year before.

The salary reduction, which GVC said came after “feedback” from investors, equates to a overall cut of just 0.8%. Many of GVCs’ investors are not impressed and a big protest vote is expected at the annual meeting.

Few of them, though, are expected to turn up in person as the Isle of Man-headquartered company is holding its AGM in the Sunborn hotel in … Gibraltar.

One of GVC’s top five shareholders, Merian Global Investors, has gone on the record stating it will vote against the pay report, despite Alexander’s £150,000 pay cut. “We are concerned by the apparent lack of consistency between the targets under the new LTIP awards and the performance that we, and we understand management as well, expect of the business,” said Richard Buxton, Merian’s head of UK equities.

Shareholder advisory firms Pirc and Glass Lewis are both recommending shareholders vote down the remuneration report, describing the payouts as “excessively disproportionate”, and point out that Alexander’s pay is roughly 550 times more than that paid to the company’s average employee.

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Alexander got investors’ backs up further this spring, when he and chairman Lee Feldman sold about £20m worth of GVC stock – causing the firm’s shares to drop almost 20%.

That sale came just three days after Alexander had insisted that the betting group, which includes Coral as well as multiple online brands, was “significantly undervalued”.

GVC isn’t the only company raising hackles over excessive pay. The boss of Gulf Marine Services, a London-listed, Abu Dhabi-based oil and gas services company, is fighting for his job after more than 85% of investors voted against his pay last week.

Duncan Anderson, 56, was paid £650,000 last year, including a £165,000 bonus, despite the company’s shares falling 77% in 2018. Anderson’s re-election as a company director was opposed by 32% of investors. The firm’s incoming chairman, Tim Summers, told shareholders the board “recognises the judgment of our shareholders”.

More than 42% of shareholders in FTSE 100 asset manager Standard Life Aberdeen revolted earlier this year against the remuneration report in frustration at the £1.25m pay package proposed for incoming chief financial officer Stephanie Bruce. In May, almost 40% of investors failed to back the pay report at Asian-focused bank Standard Chartered.

Excessive pay is also on the agenda in the US, where leading Democratic presidential candidate Bernie Sanders is preparing to gatecrash Walmart’s annual meeting, also on Wednesday, to demand the world’s biggest retailer increase “poverty wages” for its 2.2 million workers.

The question for Alexander, who first got a taste for making money as a 13-year-old when his father took him to the races at Ayr, is whether GVC can get the remuneration report away with a smaller rebellion than the 44% of investors who voted down his pay award last year. The form guide suggests he will get away with it, just.

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