Ladbrokes boss agrees pay cut in gamble to head off revolt

The embattled boss of Ladbrokes' owner has agreed to reverse a six-figure pay rise in a desperate bid to head off an investor revolt at next month's AGM.

Sky News can reveal that Kenny Alexander, the chief executive of GVC Holdings, is to forego the bulk of a recent increase in his basic salary from £750,000 to £950,000 after discussions with the company's chairman and other board members.

Mr Alexander's base pay will instead be set at £800,000 from the beginning of next month.

The decision by Mr Alexander comes at a time of growing City unrest about GVC's governance and performance.

Shareholders were furious in March when hundreds of millions of pounds was wiped off the gambling giant's market capitalisation by the disclosure that Mr Alexander and chairman Lee Feldman had sold £20m of shares.

Sky News subsequently revealed that Mr Feldman's departure would be accelerated as a result of the row.

GVC's hopes that the decision to abort its chief executive's pay rise would avert a revolt at its 5 June AGM look likely to be dashed, however.

A number of voting advisory agencies have already recommended opposing its remuneration report following the disclosure that Mr Alexander was paid more than £19m last year.

The bulk of that package - which made him one of the best-paid corporate bosses in the UK in 2018 - came in the form of long-term share awards.

A number of heavyweight City institutions, including Merian Global Investors, are unhappy that new incentive targets mean Mr Alexander and senior colleagues would receive the full amount of future awards for achieving a profit figure in three years' time that is below analysts' current consensus forecasts.

"We have discussed this extensively with the remuneration committee chair and there seems to be a complete disconnect between the 'considerable uncertainties' cited by management when in discussions with the remuneration committee and the overwhelming confidence management expresses when in conversation with us as shareholders," said Richard Buxton, the head of UK equities at Merian.

"If management does only deliver the targets set by the committee, the market will be significantly disappointed."

Mr Buxton said that Merian would be voting its shares in GVC against the pay report.

If there is a major revolt next week, it would be the second consecutive year in which pay has been a flashpoint at GVC's AGM, and is likely to trigger calls for a much wider boardroom clear-out.

Its shares have fallen by more than 40% during the last 12 months, leaving it with a market capitalisation of £3.46bn during Wednesday's trading session.

Mr Feldman had already been facing pressure under new corporate governance guidelines to step down in the near term, having chaired GVC since 2008.

His decision to join Mr Alexander in offloading a chunk of their shareholdings in March - just days after the chief executive insisted that the company was "significantly undervalued" - left many investors incandescent.

In a statement, GVC said: "After consulting with GVC's chairman and remuneration committee chair, GVC's CEO has volunteered to reduce his annual salary from £950,000 to £800,000.

"This offer was made in light of recent shareholder and proxy adviser feedback on GVC's 2018 remuneration report and on our Remuneration Committee Chair.

"This change will take effect from 1 June 2019."