A revolt at the annual meeting of Betfair, the online betting group, has led to almost a third of investors voting against the company’s remuneration package.
The vote is part of a continuing skirmish over pay at Betfair and follows a similar attempted rebellion over an accounting error about the past payment of dividends.
Gerald Corbett, the chairman, was forced to defend the latter after Pirc, the shareholder pressure group, had called for the entire report and accounts to be thrown out.
Pirc had claimed that earlier dividend payments and share buy-backs were illegal because the company had insufficient distributable reserves to cover them.
In the event, that revolt failed to materialise, with only 3 per cent of those voting — holding more than 70 per cent of the total share capital — rejecting the accounts.
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Instead, 32 per cent voted against the directors’ report on remuneration. The rift is over an earlier change to the Long-Term Incentive Plan (LTIP) that seemingly made it easier for the board to achieve the necessary targets. Had the original plan remained in place, the objectors said, no pay-out would have been made.
Breon Corcoran, the chief executive, defended his company’s record after the annual meeting. He said: “The feedback from shareholders is that they are very satisfied with the progress we are making. The share price is at a recent high. They [the shareholders] were close to unanimous in their support for all the other propositions.”
The LTIP, which was based on revenue and earnings targets for the financial year to the end of April this year, was redrawn because of changes in European legislation governing the gaming industry. These included a turnover tax on exchange betting in Germany and unfavourable adjustments to regulation in Spain and Italy. Betfair operates an exchange that matches customers online and allows them to place bets against one another.
The company said in a statement after the meeting: “The board consults regularly with shareholders on remuneration and welcomes the support of a majority of shareholders on this matter. It also understands, however, that certain shareholders have policies to oppose any amendments to targets and this was reflected in today’s vote following adjustments to an historical LTIP scheme.”
The dispute over dividends centres on an apparent mistake by auditors, which was flagged in the annual report. The funds to cover the payments had been held within a subsidiary rather than with the main company.
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Mr Corbett described this as a technicality. “It’s disappointing. I am sorry it has happened,” he said.
However, one shareholder raised a further objection. Richard Greening, chairman of the pension fund for Islington Council, said: “The issue for us is to what extent can we be confident about the accounting process and auditing that is going on?”
There have been disputes over pay at Betfair before. The company was floated at £13 in late 2010 but the share price plunged.
Mr Corcoran was making an upbeat report on trading in the first quarter to the end of July. Betfair got a boost from the World Cup as punters flocked to place bets, despite England’s poor performance. World Cup revenue, at £15.9 million, was double that generated at the previous big football tournament, Euro 2012. As a result, revenues for the quarter across the group were ahead by 30 per cent.
The shares added 35p to close at £11.30.