The gambling software developer Playtech warned that its shareholders may take further action after an executive payment has faced criticism. This happened after some concerns regarding the firm’s corporate governance were raised by an activist investor.
According to media reports, Springowl hedge fund (based in New York) has privately called for the gambling software supplier to cut its commercial ties with Teddy Sagi, the company’s founder. Reportedly, the hedge fund has also urged the Isle of Man-based company to come up with an official plan for its Chief Executive’s succession.
The corporate governance concerns of the New York-based hedge fund boosted the pressure on the gambling software developer, as later today Playtech is to face the possibility of serious investor actions against its bonus plan. This is not the first time the company has encountered certain difficulties, as it has been seriously affected by a series of similar investor revolts regarding executive payment in the last few years. Later today, the company’s shareholders are set to vote on Playtech’s plan to award Mr Weizer a bonus scheme as part of which he could get stock estimated at £30.4 million in case the company’s share price reaches £16.
Currently, Springowl holds an almost 5% stake in the gambling software supplier. So far, the company run by Jason Ader has managed to force Playtech to improve its governance, and the idea has been backed by some other investors who have been urging the firm to make changes in its board.
Springowl Hedge Fund Shares Concern about Playtech’s Corporate Governance
Two investor advisory groups that have considerable influence on the company, Glass Lewis and Institutional Shareholder Services, have made recommendations that the company’s shareholders should reject the aforementioned bonus scheme.
According to unnamed sources with knowledge of the issue, Springowl has broadly backed the payment scheme but has other concerns.
The 47-year-old Israeli billionaire who established Playtech two decades ago, Teddy Sagi, sold his remaining stake in the Isle of Man-based gambling software developer in 2018. However, at the time when Mr Sagi was the largest shareholder in the company, the supplier had purchased many other companies from its founder in related-party transactions that were found concerning by investors.
Recently, a partnership between another company owned by Mr Sagi, Skywind, and Playtech has been signed through the Snaitech unit. The deal has raised certain concerns at Springowl.
As mentioned above, a source close to the US hedge fund explained that Springowl has been urging Playtech to come up with a succession plan for him as quickly as possible. In addition, Springowl has called for the gambling software company to replace its Chairman Alan Jackson who has spent six years on the position. Reportedly, the company has been working on finding a suitable replacement.
- Author
Olivia Cole
