The top bosses of gambling powerhouse GVC Holdings have signed off each other’s recent sale of a large chunk of their personal stakes in the company, The Sunday Times reports
The news outlet has understood that outgoing Chairman Lee Feldman and CEO Kenny Alexander have given each other permission to offload a combined £20 million worth of company shares. GVC shares sunk nearly 20% to hit their lowest in nine years as a result from the move.
Under the Financial Conduct Authority’s rules, a company’s Chairman must be granted permission from the Chief Executive to sell shares and vice-versa. However, the FCA does not say anything about rare occasions where both executives opt to offload stock. A veteran chairman has told The Times that Mr. Feldman and Mr. Alexander’s move was “not something [he] would call a good practice.”
Last month, Mr. Alexander sold more than half of his personal stake in the owner of Ladbrokes Coral to trouser £13.7 million, whilst Mr. Feldman sold about three-quarters worth of stock for £6 million.
The move spooked investors who interpreted the company’s top bosses’ actions as a sign of diminished confidence in GVC’s future. As mentioned about, the share sale wiped off nearly 20% of the gambling operator’s market valuation.
GVC has not denied its Chairman and its CEO’s involvement into each other’s disposal of shares. It told The Times that “the transaction was undertaken adhering to corporate governance proceedings.”
Mr. Feldman announced his departure from GVC shortly after his share sale. It is believed that his decision to leave was prompted by investor discontent. However, the company said that his stepping down had been under discussion way prior to the March share sale.
Commenting on his actions, Mr. Alexander has told The Times that he would have not opted to sell shares, if he had known how badly this would impact GVC and that they now need to move on and “recover the lost ground.” He has also pointed out that people over-reacted to his disposal of shares, which he actually did for the first time.
While Mr. Alexander and Mr. Feldman each signing off the other sale is not against the rules, in principle, it could prompt discussions within a company that has a history of clashing into shareholder discontent.
Last spring, 45% of the gambling operator’s investors voted against the proposed fat-cat pay to its CEO. This was the second shareholder revolt the company suffered over “excessively disproportionate” pay awards to its bosses, including Mr. Alexander, in as many years.
Mr. Alexander has been with the gambling powerhouse for more than a decade now and has been part of its evolution from a seven-person business worth a little over £23 million into a behemoth multi-national operation with market cap of more than £3.6 billion. The executive successfully navigated GVC through the bwin.party takeover in 2016 and the acquisition of Ladbrokes Coral last spring.