Tabcorp boss quits immediately for ‘offensive language’ breach as board starts a replacement hunt

Tabcorp boss Adam Rytenskild has resigned for ‘using inappropriate and offensive language’ in the workplace and will forfeit any incentive rewards.

Tabcorp in February reported an interim net loss after tax of $636.8m. Picture: Stuart McCormick

Tabcorp boss Adam Rytenskild has resigned for “using inappropriate and offensive language” in the workplace – allegedly calling someone a “useless c...” or words to that effect – with his shock exit set to cost up to $10m in lost shares and options.

The Tabcorp board said it considered the language to be inconsistent with Mr Rytenskild’s continued leadership of the organisation.

The gambling giant’s chief executive said he didn’t recall making the alleged comment “and it’s not language I would usually use”.

“But I have regrettably agreed to resign,” Mr Rytenskild said.

“Tabcorp has been an enormous part of my life for many years and I believe in the journey the company is on.”

The Australian’s Margin Call column revealed Mr Rytenskild allegedly used the obscene phrase in front of a number of people, not all of whom were from Tabcorp.

Industry sources said Mr Rytenskild had also made an offensive comment during a meeting involving external stakeholders.

Tabcorp said that, following discussion with the board, Mr Rytenskild had tendered his resignation and would step down immediately.

The company said Mr Rytenskild would receive only the termination payments required by law and under his contract, and he would forfeit all his unvested short-term incentive and long-term incentive rewards, thought to be worth up to $10m.

“Tabcorp expects its leaders to uphold company values at all times and will not hesitate to take action to uphold expected standards of conduct,” the board told the ASX.

“To protect the privacy of those involved, Tabcorp does not intend to make any further comment in relation to the conduct.”

Tabcorp chair Bruce Akhurst said the board regretted that Mr Rytenskild’s employment had ended in this way and acknowledged his commitment to Tabcorp’s growth over more than two decades, including the past two years as managing director and chief executive.

“Today’s change does not impact the strategic direction of the company,” Mr Akhurst said.

“We have the depth and capability across the executive and the senior leadership team to continue our transformation.”

Tabcorp said it had appointed executive search firm Maritana Partners to commence a global search for a new chief executive.

Mr Akhurst has agreed to take on additional duties as executive chairman with immediate effect.

Adam Rytenskild has resigned.

Bruce Akhurst will assume additional duties.

Mr Akhurst will be paid additional remuneration of $1,706,700 per annum, including superannuation, paid monthly on a pro rata basis during the period he serves as executive chairman, bringing his total remuneration to $2.2m a year while in that role.

He will not participate in any of Tabcorp’s employee incentive plans due to the interim nature of his appointment and will continue until a permanent CEO takes over.

“We remain focused on executing our strategy at pace, transforming our competitiveness, growing market share, levelling the playing field for fees, taxes and regulation, and reshaping the business, to deliver a more efficient and effective organisation,” said Mr Akhurst.

“Tabcorp is on track to deliver this and create a growing and more valuable company for shareholders.”

Last year, the Australian Shareholder Association (ASA) said Tabcorp executives were paid too much and advised a vote against the company’s remuneration report for the second time.

Mr  Rytenskild’s remuneration target – including fixed pay and bonuses – was $4.5m last year.

Chairman Bruce Akhurst’s fees, which included superannuation, totalled $517,300.

The ASA said Tabcorp’s remuneration framework had “not reflected the reduction in size and complexity of the company after the demerger with The Lottery Corporation”.

Mr Rytenskild joined Tabcorp in 2000 and has been a member of the executive team since 2010, most recently as managing director of it wagering and media.

Tabcorp under Mr Rytenskild has faced increasing competition from big international bookmakers such as Ladbrokes and Sportsbet as customers abandon in-person wagering and place bets online.Tabcorp, which has a substantial network of betting shops, pays double the wagering fees and taxes of bookies like Sportsbet and Ladbrokes that are only licensed in the Northern Territory and only pay a point of consumption tax on a state-by-state basis.

Queensland and Victoria have made tax changes to ensure everyone pays the same, with other states currently looking at the same “level playing field”.

“We expect level playing fields to ultimately be introduced across the country,” Mr Rytenskild said last month.

Tabcorp in February reported an interim net loss after tax of $636.8m and took a non-cash impairment charge of $731.9m on its wagering business.

Revenue dropped 5 per cent to $1.2bn.

Mr Rytenskild is not the only Australian chief executive to leave for alleged behaviour issues. Last year, the boss of crypto charity GiveTree stepped down following what his own company described as “misogynistic” comments aimed at women.

In 2021, Oil Search was rocked when chief executive Keiran Wulff abruptly resigned from the Papua New Guinea LNG producer following a series of complaints about his behaviour. Oil Search, now owned by Santos, said Mr Wulff resigned on medical grounds.