- Legal States
Simon Deloit May 2, 2020 3 min read
GVC Announces Temporary Pay Cuts, Execs Forego Bonuses
Sports betting giant GVC has implemented payment reduction and bonus cuts for the company’s high-ranking employees in a bid to help it pull through the COVID-19 outbreak.
GVC Execs Opt Out of Bonuses to Support the Company
GVC has announced pay cuts for high-ranking staff members. The measures will affect everyone up the command chain, and specifically the Executive Committee and Executive Board of Directors who will forego planned bonuses this year. In addition, all directors and members of the executive committee have accepted a 20% voluntary reduction in their salary. The pay cut came into effect on May 1 and it will last over the next three months.
GVC Chief Executive Kenny Alexander will forego a hefty bonus he was supposed to receive owing to the company’s performance in 2019. Similar moves were already taken by other companies, including William Hill. The money from the planned $2.5 million bonus will be used to help the company soften the financial hit from the coronavirus outbreak. GVC CFO Rob Wood will also forego his bonus amounting to $0.8 million. GVC had to vote on the bonus changes yesterday, May 1, Friday at their Annual General Meeting but the meet-up was postponed. The measures regarding executive remuneration have been implemented though.
Revenue Growth for Q1 but Monthly Profits Affected
GVC posted revenue growth for April despite global business uncertainties. The increase is only 1% comparing to Q1, 2019, yet it demonstrates resilience. Although small growth is observed, as a precaution, the British holding suspended a planned dividend payment. Back in March, GVC predicted a reduction of its monthly earnings before interest, taxes, depreciation, and amortization (EBITDA) of some $125 million. This was mainly because most sports events were placed on hold in order to reduce the spread of COVID-19.
Later on, the British holding predicted a lower figure of around $60 million monthly following emergency actions that were implemented. Mostly affected will remain the GVC’s monthly cash flow which would be around $18.5 million.
Bonus Forego and Payment Reduction as a Tool
Both employers and employees struggle as most countries have already implemented strict lockdowns that have effectively closed casino businesses. Worldwide, sports events have suffered. The Tokyo Olympics, for example, will take place in 2021 instead.
GVC is not the first to apply the payment reduction and forego of bonuses. Back in March, Joe Asher, CEO of William Hill, started a fund by donating his salary to help the company’s employees. Later on, in April, the company has announced a reduction of remuneration packages and suspended bonuses for the executives and senior employees.