Daniel Williams

Tabcorp Executive Remuneration Packages Face ASA Criticism for Being Too High

While it advises a vote against the remuneration report of Tabcorp for the second time, the Australian Shareholders’ Association (ASA) shared that the Australian betting giant’s executives receive too much money. Apart from that, the ASA is also recommending investors turn down the re-election of David Gallop at the position of Tabcorp director following concerns regarding the payment received by the company’s executive were ignored.

In its voting intentions, the Australian Shareholders’ Association shared that Mr Gallop chairs the nominations and remuneration committee and as such, he is the one responsible for overseeing remuneration packages. As mentioned above, the not-for-profit organisation which advocates for the rights of retail shareholders shared an assessment that the CEO and chairman of Tabcorp were overpaid, saying there had been no meaningful change in their salaries despite the concerns.

Now, the body advised shareholders to vote against Mr Gallop’s re-election, although it has highlighted Mr Gallop’s extensive qualifications and experience in the sports industry. He served as the CEO of the National Rugby League (NRL) in the period from 2002 to 2012 and is currently a director of Cricket NSW. According to the Association, Mr Gallop needs to approximately double his existing shareholding in order to meet the one-year’s fee value shareholding policy of Tabcorp by 2025.

The main problem that the Australian Shareholders’ Association has in this case, is associated with the fact that the remuneration framework of Tabcorp has not reflected the company’s reduction in complexity and size following the completion of The Lottery Corporation’s demerger.

ASA Advices Shareholders to Vote Against David Gallop’s Re-Election

According to the ASA, the remuneration levels of Tabcorp’s chair and CEO are currently excessive. To back these claims, the not-for-profit organisation cited the 77% decline in the company’s market capitalisation following the demerger, while the CEO remuneration dropped only by approximately 10% and the chairman payment dropped by 15%. In contrast, when the reverse happened after the completion of Tatts acquisition in 2017, the CEO and chairman remuneration rose by 43% and 37%, respectively.

The Australian Shareholders’ Association has argued that it had to pay above median benchmarks because there is a higher degree of personal risk and exposure when working in the gambling sector, the company is currently transitioning, and it is not on a level playing field. The organisation has also advised shareholders to turn down the granting options to Mr Rytenskild, the chief executive officer of Tabcorp.

Reportedly, the remuneration target of Tabcorp’s CEO Adam Rytenskild (including fixed pay and bonuses) is AU$4.5 million in 2023 but it could increase to AU$6.75 million in case he outperforms. The chairman Bruce Akhurst, on the other hand, received a total payment of AU$517,300, plus superannuation.

In Tabcorp’s annual report, Mr Gallop noted that the remuneration benchmarking peer group of the Australian betting giant had been reviewed by the board. He further explained that before the demerger, the peer group consisted of the Australian Securities Exchange (ASX) 25-75 companies but this is no longer relevant for the time being. As Tabcorp’s director explained, the board took into consideration a number of factors, such as the company’s market capitalisation, ASX industry classification, annual revenue, the quality of directors, etc., when determining an appropriate peer group.

As mentioned above, this is not the first time the Australian Shareholders’ Association has initiated such a campaign against the remuneration report of Tabcorp. A similar move of the body failed in 2022.

Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.

Daniel Williams

Author: Jerry Lewis