Aristocrat to Seek AGM Approval for Directors’ Fee Increase

Manufacturer of casino slot machines Aristocrat Leisure is considering an increase on fees paid to directors as the business continues to expand and generate more board-level workload.

Up to Two New Non-Executive Directors

Aristocrat said the board of directors would be asking its shareholders at the next annual general meeting (AGM) to increase the money available for non-executive directors’ fees, including provisions for additional non-executive directors.

The slot machine manufacturer outlined the increase was needed to ensure “sufficient flexibility to attract and appoint global directors, including up to two new non-executive directors for the board,” as well as to “facilitate orderly board succession planning.”

According to the announcement, the board would be asking its shareholders to increase the “non-executive director fee pool” by 25% to AU$4 million ($2.9 million) per year, looking to maintain the company’s fee competitiveness in the current market environment as well as increase the current number of six non-executive directors.

Aristocrat reported that the last occasion directors’ fee budget expansion was approved took place at the AGM in the financial 2018 but since then the company’s market capitalization nearly doubled, bringing “increased workload and responsibilities of the board and its committees.”

As the business continues on a strong growth path in its core and adjacent markets, the directors are convinced the volume of work would continue to increase over the coming years, including through the acquisitions the company undertakes to execute on its growth strategy.

M&A and FY2021 Performance

Aristocrat is currently in the final stages of a deal to acquire London-listed gaming content and technology supplier Playtech in a transaction valued at AU$5 billion ($3.7 billion).

Recently, Playtech announced it unloaded its financial division Finalto to Gopher Investments to pave the way for the acquisition to complete but the deal may face unexpected hurdles after the significant increase in Playtech stock coming from Asian investors, some of who acquired shares of the LSE-listed tech company at a price much higher than the one Playtech had accepted from Aristocrat.

Aristocrat is also facing the possibility of a competitive bid from a consortium led by former F1 team owner Eddie Jordan, JKO Group, co-established by Jordan and former Scientific Games executive Keith O’Loughlin. JKO Group was reported to be mulling over an offer of cash and contingent value rights involving Mexico-oriented Caliente Group and was given until January 5 to submit a firm bid.

On the financial side, Aristocrat continued to outperform expectations after its financial year 2021 report revealed an increase of 81% in profit year-over-year fueled by growth in the digital space mainly from operations in the Americas.

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