18th of November 2012 Author: Glo Wood
If William Hill succeeds in its GBP 530 million bid to acquire Sportingbet, the controversial pay out to Andrew McIver and Jim Wilkinson, Sportingbet bosses, will become feasible.
The potential pay-off would provide two years' worth of salary, pension payments and bonuses for McIver and Wilkinson if they leave the company following a sale. Mciver's shares in Sportingbet currently sitting at 3 million, would give him an additional GBP 1.9 million, while his package would be worth GBP 2.4 million.
Not only did Sportingbet's executive incentive packages meet resistance from shareholders in the past, when last year 24.4 percent of its investors voted against a new incentive plan, but they are also in direct contravention of the UK corporate governance act which stipulates that notice or contract periods should be one year or less.
The group stated that in spite of its awareness of breaching the UK corporate governance act, '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.'
As shareholder group Pirc commented: "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.'
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