Pay packages of top Flutter Entertainment executives shrunk 40% in 2022
Annual report reveals beefed-up long-term incentive plans and 5% payrises in 2023 for CEO Peter Jackson and incoming CFO Paul Edgecliffe-Johnson
Flutter CEO Peter Jackson and outgoing CFO Jonathan Hill each saw their total 2022 remuneration shrink by more than 40% on significantly reduced bonuses and benefit plan payments, according to the firm’s 2022 annual report.
In the case of Jackson, his total pay package fell 45% year on year (YoY) to just over £4m, down from £7.3m twelve months prior. A key part of this was a 56% YoY decline in variable pay benefits to £2.7m in 2022 from a 2021 high of £6.2m.
He was paid £1.1m in base salary, with a further £1.1m in annual bonus. His pay was topped up with £1.6m in the shape of the shares, £169,000 in pension payments and £7,000 in benefits.
Hill saw his total package slip by 43% in 2022 from £4.2m to £2.4m, of which £693,000 was base salary, £633,000 in annual bonus and £941,000 in shares.
As the report states, Flutter’s executive directors are entitled to bonuses totalling 285% for the CEO and 265% for the CFO, respectively, with bonus payments based on a combination of company performance metrics across all divisions.
Despite exceeding targets related to the US-based FanDuel business and its safer gambling-related objectives, Flutter’s non-US EBIT failed to exceed 2022 performance targets, leading to lower bonus payments.
The firm’s non-US earnings had been targeted at £1.15bn, however the operator only achieved a return of just over £1bn.
Flutter awards bonuses based on four key metrics, with each holding its own weighting in terms of the final payment.
In 2022, this was broken down as: group EBIT excluding the US (60%), FanDuel revenue in existing states (30%) and safer gambling (10%).
In 2023, this is set to change to: group net revenue (30%), group EBIT (25%), US EBITDA (25%) and safer gambling (10%).
Looking ahead to 2023, Flutter has confirmed that Jackson and Hill will see their respective salaries rise 4.5% to £1.2m and £747,175, respectively.
Hill’s incoming replacement, Paul Edgecliffe-Johnson, will be paid an annual salary of £750,000 when he takes on the CFO role on 20 March. Hill is set to become the group’s new COO.
Jackson and Edgecliffe-Johnson could potentially net a combined £28.5m in share grants by the end of April as part of executive management benefits.
The share award forms part of benefits granted to the pair under Flutter’s ‘Executive Directors’ Long Term Incentive Plan (LTIP)’, with all payment of benefits subject to shareholder vote.
Grant payments will be made over four years, with annualised payments totalling £4.8m for Peter Jackson and £2.2m respectively for Paul Edgecliffe-Johnson.
The annualised value face value of the share grants for Jackson correlates to 400% of his total salary, while for Edgecliffe-Johnson this is 300%.
This represents a rise from 180% for the CEO and 150% for the CFO.
The grants will be made on 28 April 2023, the day after Flutter’s annual general meeting, where payment awards will be rubber-stamped or rejected by shareholders.
As with the payment of bonuses, these grants are payable based on Flutter achieving total shareholder return (TSR) targets based on the business’ performance.
Flutter noted that the four-year combined LTIP would replace the standard annual approach. The FTSE 100 firm said this would allow the reward to be “more directly aligned to shareholder experience over the same period”.
A new LTIP will not be put in place until 2027 under the new structure.
The new proposals come one year after a third of Flutter shareholders opposed a 26% base salary increase for Jackson, which saw his pay jump from £923,000 to £1.1m.
At the time, Flutter said the pay increase was needed to bring the salary levels within competitive market range.
In its most recent set of financials, Flutter reported a 22% year-on-year (YoY) constant currency (cc) increase in its group revenue to £7.6bn during 2022.
Flutter also revealed a 4% YoY increase in group EBITDA, which rose to just over £1bn in the year, or £1.2bn with the exclusion of the US market.
Financials were buoyed during the period by a 21% YoY rise in sports betting revenue across the group to £4.7bn and 23% YoY growth in gaming revenue, which rose to £2.9bn.