GVC Holdings’ executives will have their pay cut and forego their bonuses to help offset the impact of the coronavirus pandemic.
Last week, GVC Holdings announced that its board and remuneration committees have approved a pay cut for its executive committee members and to forego bonus payments for certain members of staff for 2020.
Details on the pay cut
All of the company’s directors and members of the committee will take a voluntary 20% reduction in basic salary and fees for three months. This came into effect on 1 May and forms part of GVC’s plans to help mitigate the financial impact the coronavirus pandemic will have on business operations.
On top of this, executive board members and executive committee members will forego their 2020 bonuses.
Kenny Alexander, GVC’s chief executive, was set to receive a bonus payment of £2m thanks to the company’s performance in 2019. On top of this, GVC’s chief financial officer, Rob Wood, was due to receive a bonus of £658,000 for the year after taking on his role in March 2019.
The company’s bonus payments were subject to a vote at the GVC Annual General Meeting which was scheduled to take place on 30 April but was postponed due to the coronavirus pandemic.
GVC’s response to the pandemic
The coronavirus has had a significant impact on the UK gambling sector. In March, after sports leagues around the world announced their events would be put on hold, GVC predicted the sport shutdown would reduce its EBITDA by about £100m.
However, after taking several actions to mitigate the impact of the virus, GVC predicted it would instead take a £50m hit per month. The operator also said that due to this, its average monthly cash outflow would be limited to £15m.
To help mitigate the impact, GVC took advantage of the UK government’s scheme to provide grants to businesses to help with employment costs. GVC also paced staff from the land-based venues on furlough along with full pay.
In April, GVC announced a year-on-year increase on its revenue for the first quarter of 2020, despite the impact of the coronavirus pandemic. However, due to uncertainty, the company chose to cancel a planned dividend payment.
According to GVC’s report, total net gaming revenue for the three months ending 31 March 2020 was up by 1%.