Playtech shareholders are up in arms over a proposed €100m ($110m) bonus pool for senior executives following the sale of Italian gambling operator Snaitech for €2.3bn ($2.5bn) to Flutter Entertainment. The controversial plan, announced on the same day as the sale, would see Snaitech’s management receive a €34m ($37m) bonus pool, with CEO Mor Weizer potentially being the biggest beneficiary.
Critics have raised concerns about the lack of performance targets tied to the bonus plan. Australian activist investor Jeremy Raper has gone so far as to label it as “the most egregious case of shareholder value expropriation in the history of UK public markets.” He fears that the plan could set a dangerous precedent, incentivizing management to pursue deals without considering their impact on the company.
Peter Smith of Palm Harbour Capital has also voiced his opposition, arguing that the executives already receive generous remuneration that is partially linked to share price performance. He pointed out that the share price dropped following the Snaitech announcement, indicating market skepticism about the bonus plan.
Despite the backlash, Playtech plans to hold a shareholder vote on the matter by the end of November, with 34.4% of the company’s shareholding already in support. CEO Mor Weizer defended the bonus plan during a recent earnings call, stating that it would incentivize growth and value creation for investors.
The controversy surrounding the proposed bonus scheme highlights the ongoing debate over executive compensation and accountability in corporate governance. Shareholders are demanding greater transparency and accountability in how bonuses are awarded, particularly in cases where performance targets are not clearly defined.
Ultimately, the outcome of the shareholder vote will determine whether the executives at Playtech will receive the lucrative bonuses, or if the company will be forced to reconsider its compensation practices in light of shareholder concerns. The decision will have far-reaching implications for corporate governance and executive compensation practices in the gambling industry and beyond.