Kenny Alexander is the Chief Executive, or CEO, at GVC. This is the company that owns Ladbrokes, which is widely known as one of the top gambling operator sin the United Kingdom. It was recently stated that Alexander will be taking an enormous cut to his salary, reducing it by around 25%. This will see his monthly earnings topple from around £950,000 to a less impressive £800,000. The official story is that the salary reduction was a voluntary move by Alexander, but this may not quite be the case. He is on record as to giving himself a pay rise just recently, which added the 25% that he has now offered to give back.
GVC Holdings made an official statement on the issue, openly stating that after consultations were done with the company chairman and the remuneration committee chair, Alexander had agreed to the pay cut, which would go into effect from the 1st of June. They made specific mention that it was an offer on the part of Alexander, after shareholder feedback had been given on a 2018 remuneration report. But why the CEO made the offer in the first place seems to be more than just a generous offer on his part, as was reported by Sky News.
It seems that this situation has all come about after a previous study in the United Kingdom, which had put forward information regarding the gaming industry in the United Kingdom. The study found that problem gambling had been on the rise, and that corporations such as GVC Holdings did not do enough to help counter the social issues.
The report also pointed at the perceived high salaries of corporation CEO’s that oversaw gaming operators, such as Ladbrokes, declaring that more funds could be redirected from CEO earnings to the social responsibility initiatives. It was this report, combined with shareholder pressure that resulted in the cut in salary for Alexander.
The situation also harkens back to changes made back in 2005 in the UK. It was then that the Labour party deregulated the gambling and sports betting industry in the country. Laws implemented at the time declared that bookmakers were required to give 0.1 percent of all their earnings to social projects. Projects that specifically were aimed at raising awareness of issues that arose around the industry, and likewise offering treatment for those who may be afflicted with problem gambling.
The recent report released claimed that the 0.1 percent being paid was not sufficient, and that more could be done in order to help curb the rise in social problems. So, the cut in pay was a direct response to the report, and the accusations that not enough was being done by firms to fulfil their social responsibilities.
If the salary cut move will be enough to hush critics remains to be seen, although that Alexander had raised his salary the same amount it was reduced might cause more controversy than it quells.