Crown Resorts Hit by Shareholder Revolt Over Executive Pay Plan
Posted on: October 21, 2021, 03:05h.
Last updated on: October 21, 2021, 04:02h.
Crown Resorts shareholders have voted down the embattled company’s remuneration report. The move, at the company’s virtual AGM Thursday, signified widespread discontent over fat payouts to executives, many of whom have left the company under a cloud.
Almost 31 percent of proxy voters rebelled against pay proposal, surpassing the 25 percent threshold for the second year in a row. This second strike against Crown’s leadership automatically triggered a motion to gut the board completely. But shareholders resisted pressing the nuclear button, with 95 percent of proxies voting against.
Crown paid more than A$20 million (US$15 million) to departing directors in the 2021 financial year, A$9.6 million (US$7 million) of which was in severance packages.
Many directors were recommended for the chop by a damning report that followed a months-long suitability investigation in the state of New South Wales (NSW). The investigation ultimately stripped the company of its Sydney Casino license.
‘Poor Corporate Culture’
Former NSW Supreme Court Judge Patricia Bergin concluded that “poor corporate governance, deficient risk-management structures and processes, and a poor corporate culture,” were to blame for Crown’s troubles.
She accused directors of presiding over a company that was guilty of “facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction, and pursuing commercial relationships with individuals” connected to organized crime.
Ten of the 11 directors who appeared at last year’s AGM have since left the company. These include former CEO Ken Barton, who pocketed A$3.35 million (US$2.5 million). That’s after Bergin described him as “no match for what is needed at the helm of a casino licensee.”
She accused Barton of demonstrating a “breathtaking lack of care” when responding to media allegations that Crown was facilitating money laundering at its Melbourne and Perth properties.
According to Crown’s annual report, released last month, former Vice President of Strategy and Development Todd Nisbet walked with A$3.11 million (US$2.3 million), while former CEO of Australian Resort Barry Felsted received A$3.2 million ($2.4 million).
The only surviving director from the previous regime, interim chair Jane Halton, claimed the payments were in the “best interests of shareholders.”
“The board carefully considered each officer’s dismissal arrangements, our legal obligations, and the circumstances around us when these decisions were made, including obtaining advice,” said Halton.
“In this regard, the board believes that the decision to pay the dismissal to a former senior management was made in the best interests of shareholders, given the circumstances facing the company.”
Crown is awaiting the findings of another regulatory inquiry in the state of Victoria. That decision could pull the license on its flagship Melbourne property. A third investigation is underway in Western Australia.
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