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Wagering stalwart Tabcorp has suffered its first protest vote since 2018, after almost 35 per cent of shareholders voted against its remuneration report following critiques from three proxy advisers who have argued the businesses executives are paid too much.
Almost 35 per cent of shareholders voted against the wagering giant’s remuneration report, which revealed chief executive Adam Rytenskild’s $2.07 million salary would be higher than the median cash average for an ASX 200 company despite the business’ reduction in size since its 2022 demerger from The Lottery Corporation.
Tabcorp boss Adam Rytenskild’s $2.07 million salary was rejected by shareholders on Wednesday following proxy advice which deemed the businesses remuneration “execessive”. Credit: Alex Ellinghausen
Tabcorp’s chair, Bruce Akhurst, told shareholders at the company’s 2023 annual general meeting in Melbourne on Wednesday that the board was tasked with striking the balance between incentivising its leaders and shareholders.
“In determining remuneration outcomes for the year, the board has sought to balance financial and non-financial performance,” Akhurst said. His pay is set at $493,300 for 2023 with non-executive directors at $160,000.
If shareholders strike against the company for a second year in a row in 2024, the board will be forced to consider a spill motion.
A strike is when more than 25 per cent of shareholders vote against a motion raised by the business at their annual meeting.
Rytenskild is also eligible for a short-term bonus of between $1.5 million and $2.3 million. The board awarded him $1.14 million. Half of this incentive was deferred to equity until 2025.
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Tabcorp told the market this month its revenue had declined by more than 6 per cent in the first quarter of 2024, citing weakened trading conditions. The group’s share price has since fallen by 16 per cent and closed at 82¢ on Wednesday. Tabcorp’s market reveal followed a similar update from Ladbrokes owner and London-listed wagering giant Entain, which warned its gaming revenue had slumped by high single digits in the past quarter.
Tabcorp said its gaming services revenue was down by 13 per cent due to the sale of eBet in February and its wagering and media revenue had fallen by 5 per cent.
Proxy advisers Ownership Matters, Institutional Shareholder Services and the Australian Shareholders Association all recommended shareholders vote against the planned remuneration for Tabcorp’s executive and board. Glass Lewis recommended shareholders vote in favour and said the pay structure was understandable in the midst of a transition year.
Ownership Matters said Tabcorp’s remuneration was more like that of an ASX 30 company, instead of the 145th in the ASX 300 bracket. It said the executive remuneration structure was excessive given it missed key financial metrics, including earnings and net profit aims, over the year.
The Australian Shareholders Association said the remuneration scheme had many deficiencies. It also recommended shareholders vote against the re-election of longstanding director and chair of Tabcorp’s remuneration committee David Gallop.
Institutional Shareholder Services said the company had not updated its pay structures since demerging from its cash-cow lotteries business, which has a market capitalisation of close to $10 billion.
Remuneration was the only item at the meeting that received a protest vote. All other motions passed with more than 97 per cent support, including Akhurst’s reappointment and the re-election of non-executive directors Karen Stocks and Gallop.
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