GVC Ladbrokes endures shareholder rebellion but pay report still gets through despite CEO's £19m package

It begs the question: What would it take for the bookie's shareholders to actually vote one of these things down

Pay hurdle: Ladbrokes endured a big rebellion but ultimately cleared the fence (Getty)

What would it take for shareholders in Ladbrokes owner GVC to actually vote down one of its directors remuneration reports?

The shares have been dogs, losing about 40 per cent of their value over the last 12 months. In March the bookie, which also owns Coral, announced a third consecutive full year loss.

In the same month CEO Kenny Alexander and chairman Lee Feldman offloaded just under 3m shares between them, good for £20m at the 666p price.

Then came the annual report revealing that Alexander received £19.1m in total pay, mostly down to what was referred to as a “legacy award” (the same award took his take home to £18m the previous year).

It felt a bit like an employee walking into their bosses’ office and then pouring coffee all over them and their desk before demanding a pay rise.

Despite this, 58 per cent of the shareholders said sure, have some more money, I like the smell of coffee on my trousers. A majority passed the remuneration report.

The 42 per cent vote GVC incurred against it still counts as a significant rebellion and will get the company a place on a government sponsored naughty step, in the form of the register tracking shareholder dissent maintained by the Investment Association.

It prompted the following emollient comments from remuneration committee chair Jane Anscombe: “The Remuneration Committee notes and is naturally disappointed with the vote. We engaged extensively with shareholders ahead of the annual general meeting and would like to thank them for their helpful and constructive input.”

Here’s the thing about that statement: it’s remarkably similarly to the one in the annual report concerning the previous year’s rebellion (of 44 per cent) over the same subject.

“The Committee was, of course, disappointed by the vote and acknowledges this feedback, thanking those shareholders who spoke with the company and explained their reasons for not being able to support this resolution,” it said.

Pirc, the voting advisor, went back as far as 2015 with Ladbrokes, which has endured a succession of shareholder rebellions over the subject of pay. On every occasion it found variations on the same theme.

At Ladbrokes it’s not so much groundhog day as it is groundhog pay.

The Investment Association noted that shareholder dissent showed a market wide increase in 2018. It was moved to write to 32 companies in the FTSE All Share index to express its concern over their appearing on its register twice in a row “suggesting that they did not respond sufficiently to investor views”.

Trouble is, the recidivists appear willing to gamble that their shareholders won’t follow through with their fist waving in the binding votes they get on directors appointments or the triennial plebiscites on pay policy. They haven’t in the past.

GVC Ladbrokes holds one next year. So far the bookie’s bet has paid off handsomely for its’ bosses. The odds are it will do so again.