The activist investor that has succeeded in shaking up the board at Playtech is setting its sights on the chief executive’s pay, as it continues its campaign to improve corporate governance at the gambling software company.
Jason Ader’s US asset management firm SpringOwl has built up a $100m stake in Playtech — nearly 5 per cent. Since the stake was revealed in August, it has succeeded in persuading the company to sell its online trading website, Plus 500, and beef up its board with four new non-executive directors, two of whom were announced on Tuesday.
Now it is turning its attention to executive pay. Last year, almost 60 per cent of Playtech investors voted against the remuneration report after it was revealed that chief executive Mor Weizer had received a 78 per cent pay rise, despite falling profit. He was paid almost £4.2m in 2017, up from £2.3m in 2016, with a base salary of nearly £1m.
Sources close to the company said that, along with fellow Playtech investor Odey Asset Management, Mr Ader is pushing for a new pay package that will include less cash and more incentive-based share options.
Odey and SpringOwl are said to want a new pay deal agreed before this year’s annual meeting next month, as well as undertakings from the company to launch more share buybacks and further cost-cutting in the face of greater regulation in its key Italian and UK markets.
So far this year Playtech has committed to a €40m share buyback scheme. The company said it was working on a new pay deal but gave no details. Its annual report is due to be published next week.
Mr Ader has form in the industry: in 2015, he agitated for the sale of online gambling company bwin.party, eventually leading to its £1.1bn acquisition by GVC. He said that getting the new directors appointed to the Playtech board was achieved without any of the “mudslinging” that he experienced during the bwin.party sale.
Last year Mr Ader sent a letter to the Playtech board in which he linked the perception of poor governance with the record of its billionaire Israeli founder Teddy Sagi. Mr Sagi offloaded his remaining stake in the business, worth roughly $87m, in November.
Playtech, which provides software for many of the world’s biggest gambling companies, has sought to transform itself following a year in which it issued two profit warnings and its shares fell more than 50 per cent.
The company said in February that it had mostly retreated from unregulated Asian markets and was instead focusing on countries with greater gambling legislation. It is also seeking a licence to operate in New Jersey after sports betting was made legal last year.
Mr Ader said he saw “plenty of opportunities” to invest in other UK leisure and travel companies, although added that SpringOwl would not be “abandoning” Playtech in the near term. “I look at the G7 market and I see some of the best value in the world in the UK,” he said.
Playtech’s newest directors are John Krumins, a former panel member of the Competition and Markets Authority, and asset manager Anna Massion, who is widely respected in the gambling industry.
The company said it had been courting Ms Massion for the past 18 months. She could not be recruited to the board previously because of her role as an investor at PAR Capital.
It added that the shake-up came after “a year of engagement with all shareholders”.
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