Ahead of Playtech’s general meeting on 19 December, Ashley Hamilton Claxton, Head of Responsible Investment at Royal London Asset Management commented:
“Playtech’s latest remuneration plan is a pretty raw deal for shareholders in our view. The scheme offers significant sums to the CEO for meeting share price targets below where Playtech’s shares traded ahead of their profit warning in July last year.
“We are also concerned by the structure of the plan, as each portion of options in the plan can vest after shares trade at a certain level for a single month during the performance period. Structures like this can potentially encourage management to prioritise short-term share performance over long-term value creation.
“Finally, it is unclear how the plan will be adjusted for any share buy-backs. We would encourage the Remuneration Committee to adopt best practice by including an adjustment mechanism and disclosing how this would work in practice.
“We will therefore be voting against this plan at the company’s upcoming general meeting.”
Royal London Asset Management holds around 0.46% of Playtech, worth £5.3m, in its index tracking funds.
About Royal London Asset Management (RLAM):
Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages £130 billion of assets and employs 98 investment professionals as at end March 2019. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
For professional clients only, not suitable for retail investors.
Issued July 2019 by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.
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