PIRC urges shareholders to vote against Corcoran's GBP 11.6 million pay deal
Betfair chief executive Breon Corcoran has more than the Paddy Power merger on his mind this week, according to Irish media reports – the European investor advisory group and corporate monitor Pensions and Investment Research Consultants (PIRC) has come out in opposition to his pay deal.
Betfair shareholders have been urged by an influential body not to approve Corcoran's GBP 11.6 million pay package at the company's annual general meeting next week. Corcoran will lead the combined group Paddy Power-Betfair group, it has been announced (see previous InfoPowa reports).
The PIRC, which regularly makes media headlines with its judgements on matters of investor interest, says that the almost GBP 1 million Betfair bonus awarded to Corcoran is excessive, along with his total remuneration … the highly experienced executive apparently also received a GBP 10 million "golden welcome" payment when he joined Betfair three years ago from Paddy Power.
PIRC claims Corcoran's basic salary at Betfair during the last financial year rose from GBP 515,000 to GBP 528,000, while his annual bonus jumped to GBP 953,000 from GBP 706,000, and argues that Betfair's financial performance and shareholder return does not justify the remuneration he has received.
The shareholder advisory body is also concerned that the manner in which Betfair accounts are structured does not enable a determination of profits available for distribution, based on the numbers presented in the accounts, and it has further advised shareholders to vote against receiving the annual report, and to oppose the vote to approve the dividend due to the issues raised with the group's annual report and accounts.
Shareholders should vote against the reappointment of KPMG as the company's auditors, the PIRC suggested. "KPMG has been in place as auditor for more than 10 years," the advisory body noted. "There are concerns that failure to regularly rotate the audit firm can potentially compromise the independence of the auditor."
The Irish media pointed out this week that in its 2014 annual report, Betfair conceded that its final dividend in 2011, and the interim and final dividends for 2012 and 2013, were paid erroneously because, under law, the company "did not have sufficient distributable reserves to make those distributions and so they should not have been paid by the company to its shareholders".
The company also admitted that the purchase of 6.5 million shares in April 2012 was also undertaken when Betfair "did not have sufficient distributable reserves".
Rounding off a pretty negative assessment, PIRC advised shareholders to vote for the reappointment of Corcoran as a director, but to oppose the reelection of chairman Gerald Corbett.
Betfair investors can take or leave PIRC's recommendations; many argue that Betfair's shares have performed strongly, and customer acquisition and cash generation have forged ahead under Corcoran's leadership, culminating in the surge in share price following the announcement that Paddy Power and Betfair are to merge.
Online Casino News Courtesy of Infopowa