PartyGaming bosses to scoop £40m
Bosses at beleaguered PartyGaming hit the £40m jackpot today after the online gambling group tore up its management incentive schemes, put in new cash bonus arrangements and granted them tens of millions of new free share options.
In a bid to placate chief executive Mitch Garber and finance director Martin Weigold, whose future share-related payments have dwindled because of the US ban on internet gambling, the board today put a price of £26m on keeping the duo in the business.
PartyGaming, which had previously set boardroom pay records, is to scrap arrangements that meant Garber had to hit 'total shareholder return' targets - worth more than £30m when he was hired earlier this year - that were tied to PartyGaming's share-price performance.
Instead, an acceleration of his existing share-option package will see him pick up stock worth - at the current bombedout price of 32p - £3.2m in eight monthly tranches from May until the end of 2007 and £3.2m in 16 months' time.
He will also get a guaranteed minimum cash bonus of £2m next year and £3m payable monthly over the next two years and five months. He receives share options worth £640,000 at current prices, exercisable in May 2009, and £4.8m of share options if he stays with the company until 2016. Garber had previously got a £3.1m golden hello on top of his £550,000-a-year pay.
Weigold is due to get £9.1m under similar arrangements while 50 million share options worth £16m at current prices are to be distributed to other 'key employees'.
PartyGaming also confirmed its £19.5m takeover of Empire Online, which under 32% owner Noam Lanir will use that and cash balances of almost £130m to become an investment company.
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