Fury at pay surge for FTSE chiefs as BetFair chief executive Peter Jackson reaps a 17% rise
Investors at a string of Britain’s largest companies have been warned over rich rewards handed to executives.
Shareholder advisers at ISS have raised the red flag after Flutter – the owner of BetFair and Paddy Power – hiked its chief executive’s pay by 17.5 per cent following a merger with Canadian rival The Stars Group.
It said the board had awarded Peter Jackson ‘a significant salary increase’ that then boosted other bonuses calculated from base pay. It took his total pay to £7.5million.
Increase: Flutter – the owner of BetFair and Paddy Power – hiked its chief executive’s pay by 17.5 per cent
The rise followed the merger last year to create a firm worth £16billion, more than doubling its previous value.
ISS said shares ‘continued to rise in the months since as the sector has benefited from customers’ relative lack of choice in entertainment options during lockdown’.
The value of the enlarged group is now an eye-watering £27billion.
But ISS said Flutter should have ‘phased’ the pay rise as it waited for the shares to settle down.
‘It is considered good practice to phase in significant increases, particularly after such a large transaction, in order to allow the deal to properly bed in and confirm its value,’ ISS said.
A Flutter spokesman said: ‘Following our merger… the remuneration committee carefully considered the transformation in size, scale and complexity of the group and the consequent increase in responsibility for executive directors.’ It is ‘satisfied that the current approach, which followed extensive consultation with shareholders, is appropriate and ensures alignment with… shareholder interests’.
Flutter, which holds its annual meeting on Thursday, is the latest FTSE 100 giant to find itself in hot water over pay. Concerns have also been raised at Glencore (whose AGM is on Thursday), London Stock Exchange Group (on Wednesday) and Rio Tinto (May 6).
And last week, Pearson chairman Sidney Taurel said he would step down no later than next year’s annual meeting following the shareholder unrest last autumn over the education publisher’s decision to give chief executive Andy Bird up to £5.9million in annual pay, a ‘golden hello’ worth £7million and a £185,000 contribution to rent an apartment in New York.
Taurel, 72, said it had long been his intention to step down.
ISS and advisory services firm Glass Lewis have told shareholders to oppose Bird’s package at Friday’s meeting. They have also urged Glencore shareholders to reject a proposed package for incoming chief executive Gary Nagle worth as much as $10.4million. He is taking over from Ivan Glasenberg, who drew a yearly salary of $1.5million with no further incentives. Glasenberg is the firm’s second largest shareholder with a 9.1 per cent stake.
Tony Hayward, Glencore chairman, said: ‘We feel we came up with an overall package that was fair, balanced and equitable.’
He added: ‘We are obviously not going to withdraw it from the AGM. It will be interesting to see what the response is. Certainly, based on the conversations I have held with the majority of major shareholders, they seem to be very supportive.’
London Stock Exchange Group faces a rough ride after a 25 per cent salary increase, or £200,000, for chief executive David Schwimmer following the Refinitiv merger.
ISS said: ‘The Refinitiv acquisition remains incomplete. The full impact of the transaction on the group is yet to be determined. It is also noted that David Schwimmer only joined the board in August 2018; and [so] the award of an additional £200,000 to his salary in a single increase appears generous.
‘It represents a significant increase that could have been phased over time, subject to a performance assessment.’