Betfair Chief Is 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.