Tabcorp’s first strike against remuneration report over executive pay

Tabcorp shareholders hit out at the gaming group over concerns that CEO Adam Rytenskild and other executives are paid too much.

Tabcorp received a first strike at its annual meeting following a strong revolt by shareholders concerned that executives at the wagering giant are paid too much.

The largest provider of wagering and gaming products and services in Australia, registered a first strike after 34.25 per cent of shareholders voted against the adoption of the remuneration report.

A second strike — a vote of 25 per cent or more — at the next year’s annual meeting – will force the board to consider a spill motion.

The revolt by shareholders was led by the Australian Shareholders Association, which had encouraged a no vote, saying that Tabcorp’s remuneration framework had “not reflected the reduction in size and complexity of the company after the demerger with The Lottery Corporation”.

“We consider the remuneration levels of the CEO and chairman are excessive. This is best illustrated by Tabcorp market capitalisation shrinking by 77 per cent post demerger, yet CEO remuneration is down only around 10 per cent and chairman fees down 15 per cent,” the ASA said.

Chief executive Adam Rytenskild’s remuneration target – including fixed pay and bonuses – is $4.5m this year, but could hit $6.75m if he outperforms. Last year, chairman Bruce Akhurst’s fees, which included superannuation, totalled $517,300.

Mr Akhurst told shareholders on Wednesday that the board had sought to balance financial and non-financial performance, the unique strategic context in which the company is operating, and the need to retain and continue to motivate management to deliver its complex turnaround strategy.

Tabcorp chair Bruce Akhurst told shareholders that the board had looked to balance a number of factors in how executives are paid. Picture: Luis Enrique Ascui

“The board takes feedback from shareholders on remuneration matters seriously and following the outcome from today’s meeting will carefully consider this feedback as part of a review of remuneration arrangements going forward,” Mr Akhurst said.

The ASA had also advised against the re-election of director David Gallop, but that fell on death ears, with 99.22 per cent backing a new term for the former NRL and Football Australia boss.

Tabcorp also warned shareholders that the wagering market was soft after first quarter revenue fell 6 per cent as a challenging macroeconomic environment and cost of living crunch forces many punters to pull back.

“It’s true that the wagering market is soft, but I’m very pleased with our improving competitiveness and the momentum we’re creating in our brand that is more connected with our customers,” Mr Rytenskild said.

“Our competitors would love us to take our foot off the pedal in a soft market, but we will not. We will stay the course and stay focused on what we’re creating for the long term. That’s how we will create the most value for you, and be assured that we are in it for the long term.”

Tabcorp said it was the only big betting company to increase its earnings but suffered a double-digit slide in digital betting that was partially offset by punters making more bets in pubs and clubs.

Its annual revenue rose 2 per cent to about $2.43bn, with underlying earnings up 8 per cent to $391m. But its digital market share fell slightly to 24.5 per cent from 25.9 per cent a year earlier.