Crown Resorts Shareholders Reject Exec Bonus Deal, but Board Remains in Place

Certain Crown Resorts executives aren’t feeling a lot of love from company shareholders. The embattled casino operator, once Australia’s gambling darling, is on the verge of losing it all in the country and shareholders expect the company’s leaders to feel the sting. A vote today could have authorized millions of dollars in bonus cash, but investors made it clear that they want to see changes before rewarding executives for the company’s regulatory failures.

Crown Shareholders Reject Pay Deal

Crown shareholders have denied the company’s renumeration plan, with 30.7% voting the measures down. A minimum of 25% is needed for a measure to be rejected and, based on Crown’s sordid history over the past few decades, it’s surprising the number of no votes wasn’t higher. The company has already had its casino license in New South Wales (NSW) stripped away, with the results of investigations in Victoria and Western Australia expected soon.

According to Australian media outlet The Sydney Morning Herald, Crown paid certain executives significant bonuses last year. Former CEO Ken Barton, Crown Sydney development boss Todd Nisbet and Barry Felstead, a former Crown exec who retired at the end of last year, were paid a combined AUD$9.7 million ($7.27 million). Shareholders weren’t happy about that decision, either, but the company argues that it has been contractually obligated to give bonuses per long-standing agreements.

Crown Board Safe For Now

In accordance with Australian business law, two consecutive years of rejections of matters related to executive pay automatically trigger a no-confidence vote targeting the company’s board of directors. While shareholders don’t want to see certain Crown executives be given millions of dollars without showing that they are making a difference, the casino operator’s board was saved. The no-confidence vote could have led to the entire board being relieved, but 96% of the voters decided to keep them around. That’s largely because, of the 11 directors involved last year, only one is still there now. The others have distanced themselves from the company.

Two new directors, Nigel Morrison and Bruce Carter, were accepted by Crown shareholders during today’s vote, but Ziggy Switkowski’s future is still unclear. He is expected to be the chairman of the board, but has yet to be approved by gambling regulators to assume the role. This prevented his name from being included in the voting process.

Crown lost its ability to operate a casino at its new Sydney resort in NSW last December when the Bergin Report supported the long list of allegations that had been made against the company. An almost complete disregard for anti-money-laundering practices, knowingly accepting gamblers with ties to international warlords, tampering with gaming machines and other activity disintegrated the company’s reputation. NSW may have set the stage for the company to face other license suspensions in Australia, with Victoria expected to announce its decision at the end of this month. Western Australia’s investigation is still ongoing.