GVC Holdings director steps down amid excessive pay controversy
Peter Isola, a non-executive director of GVC Holdings, the group behind the Ladbrokes Coral brand, has stepped down from his post with immediate effect yesterday after a shareholder meeting.
The move is a win for shareholders who warned they would vote against the excessively disproportionate share payments set to be distributed to board members.
The meeting took place in Gibraltar at GVC’s annual meeting. All resolutions were approved, except for the remuneration packages for executives. Almost 44% of the votes against the remuneration package were from shareholders and 42.6% voted against re-electing Peter Isola as director.
GVC CEO, Kenny Alexander, has been awarded £45m worth of share options since 2016. Chairman Larry Feldman has earned £22.5m during the same period.
Concerned at those figures, shareholders turned to two advisory bodies, Pirc and Glass Lewis. Both advised that shareholders and investors should vote against such high remuneration packages at the meeting.
That concern is nothing new however. Last year, almost half of investors voted against supporting the payment policy at the annual meeting, something which Glass Lewis said should have triggered a change in pay policy.
Clearly they’ve completely disregarded the strong vote against last year and are continuing with a similar approach to pay. You’d hope that there will be an even stronger vote against this year. This case demonstrates that even when shareholders do oppose egregious awards, which doesn’t happen often enough, the company doesn’t have to do anything about it.– Luke Hildyard , Director the High Pay Centre
However, GVC’s pay policy is linked to its share price, something which the company says justifies the high remunerations of its executives.
Furthermore, shareholders were forced to accept those payouts as they were linked to the terms of its takeover of Ladbrokes Coral, which was approved in late 2017 and completed in March 2018.
While shareholders had threatened revolt, Isola stepping down from the position is an unexpected win. Shareholders’ votes are only advisory and they can vote on pay policies once every three years.
The group’s share price has grown tremendously under CEO Kenny Alexander, reaching a record high in May 2018 of £10.15.