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21 June 2005
Betfair Chief Given
Shares
The
chief executive of Betfair,
the betting exchange, has been given shares that will be
worth more than £10 million when the company pursues
its expected stock market flotation.
Stephen Hill, a former
chief executive of the Financial Times Group, who joined
Betfair in July 2003, stands to get 3.13 million shares,
which have been put into an employee benefit trust in his
name.
When the shares were put
into the trust this year they were valued at 271p each,
equivalent to a total of £8.47 million. The mooted
£500 million valuation on the possible float would push
the worth of the shares to well over £10
million.
A spokeswoman said that
the share award was based on the rise in the value of
Betfair under Mr Hill's tenure and was part of his terms of
employment. "He doesn't get a bonus, he doesn't have a
pension or even a company car. This is directly related to
the value of the company," she said.
Mr Hill's pay last year
rose from £269,000 to £325,000.
The firm, which would not
comment on its flotation plans, is about to appoint advisers
with a view to a possible listing early next year. It has
shortlisted Goldman Sachs, Morgan Stanley and
UBS.
Analysts said that Betfair
was unlikely to make any decision until the outcome of the
Treasury's review of the taxation of betting
exchanges.
The biggest shareholders
are Andrew Black and Edward Wray, Betfair's founders, who
between them have almost 30 per cent. Europeatweb, an
internet-based fund controlled by Bernard Arnault, the LVMH
boss, has about 10 per cent.
Betfair yesterday reported
a doubling in pre-tax profits before exceptionals to
£27.1 million in the year to the end of April, from
turnover up 61 per cent to £107.1 million. Part of the
increase came from the popularity of its internet
poker
site.
Responding to lobbying by
the big bookmakers that it should pay more tax, Betfair
revealed that its overall contribution to the Exchequer
during the year was £26.9 million, made up mainly of of
gross profits tax and corporation tax.
Betfair, which hopes to
get a licence in Australia in a joint venture with Kerry
Packer, the entrepreneur, said that it had revamped its
board to ensure compliance with the combined code on
corporate governance.
Richard Koch, co-founder
of LEK Consulting and a big shareholder, is stepping down.
Justin Dowley, former head of investment banking at Merrill
Lynch Europe, will become a non-executive
director.
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