Betfair chief executive Breon Corcoran received a pay package worth £11.6m last year after the online gambling firm paid out £10m on a golden hello granted when he joined the company three years ago.
The award, revealed in Betfair’s annual report, was paid after the company met two of three financial performance criteria originally required under the deal agreed with Corcoran when he was poached to run the business from rival Paddy Power in August 2012. The third performance hurdle related to Betfair’s return to shareholders compared with rival companies. In an unusual turn of events, this threshold was removed at a shareholder meeting in January.
In a letter to shareholders, Betfair had explained how the third hurdle had been introduced by an administrative error, and that it did not reflect the original terms agreed when Corcoran agreed to leave Paddy Power, relinquishing potential share bonuses, and head up Betfair. At the shareholder meeting, 99.8% of investors sanctioned the removal of the performance threshold.
In any event, this had no impact on Corcoran’s payout because Betfair has comfortably been among the best stock market-listed gambling groups at generating returns for its shareholders over the past three years.
A spokesman for company confirmed: “The strong share price performance over the past three years means that the total shareholder return measure would have vested in full [for Corcoran], so the removal of this element of the award has made no difference.”
The £10.1m golden hello award, in shares, comes on top of Corcoran’s salary of £528,000 and an annual bonus of £953,000. His total package was worth £11.6m, up from £1.3m for the previous year.
Speaking from the second Ashes Test between England and Australia at Lord’s, Betfair co-founder Ed Wray, who remains the largest shareholder, with a 9.5% stake, said: “It is is a large amount, but ... I couldn’t be more happy to be paying him [Corcoran] what we are paying him.” Noting that the lucrative joining award had been offered in 2012, when Betfair was in a very different state, Wray added: “As a shareholder, I think it is important to reward that kind of value creation.”
The scale of Corcoran’s pay has attracted criticism from some investor groups in the past. Last year Pirc, which advises investors on corporate governance issues, recommended a vote against Betfair’s remuneration policy, arguing Corcoran’s “potential rewards … under all incentive schemes are considered excessive”.
Since taking the helm, Corcoran has grown UK customer numbers by 250% and Betfair’s share value has risen from about £750m to £2.3bn. The company has developed a conventional bookmaking offer online, complementing its more specialist betting exchange product. According to analysts at Morgan Stanley, Betfair’s new online bookmaking business is already taking bets of £1.2bn, close to the £1.3bn staked with Ladbrokes last year.
Addressing investors in Betfair’s 2015 annual report, remuneration committee chair Leo Quinn said: “Betfair has had an excellent year ... the business has successfully increased its market share by attracting recreational customers, as evidenced by the 52% increase in active customers in the year.”
He said the reliability of revenues had been improved as the business focus had migrated away from countries where online gambling is considered contentious by regulators. As a result, only 18% of revenues now come from parts of the world which Betfair does not class as sustainable markets.
