The Rank Group, which operates Grosvenor Casino’s online and offline platforms as well as the Mecca Bingo brand, looks set for a major revolt in November over a new proposed pay scheme.
The firm’s annual general meeting will be held next month, and reports from Sky News suggest that key institutional investors are plotting to vote down the company’s planned boardroom pay policy.
This comes after the Investment Association’s IVIS service gave Rank a ‘red’ rating – a sign usually taken as an alert to shareholders that they should strongly consider voting down a firm’s proposals at its AGM.
The controversy surrounds proposed payouts to various Rank executives. A number of them took significant pay cuts s the coronavirus pandemic took hold, but now they hope to enjoy their share of a major windfall that had previously been promised to them for 2021.
It is also believed that chiefs at Rank want to rewrite the terms and conditions around when shares are awarded to executives as part of the firm’s incentivisation scheme – an idea largely opposed by present shareholders.
The complication is that Rank’s major shareholder is Hong Leong, a Malaysian businessman who is thought to own around 58% of shares in the firm. He boasts significant power in any voting action that follows.
Tough Times for Rank
With varying lockdown rules and restrictions around the world, notably the casino sector has been struggling to make ends meet.
Rank were forced to furlough some 7,000 workers – 90% of its workforce – during the first wave of the pandemic, and many are yet to return or at least have on reduced contracts.
And John O’Reilly, the operator of Grosvenor casinos and Mecca bingo halls, has slammed the Scottish government for closing his premises but allowing restaurants, bars and cinemas to remain open.
In a letter to Nicola Sturgeon, O’Reilly claimed that their closure was ‘anything but evidence-based’, and that no Covid-19 outbreaks had been traced back to either of his ventures. “We have done everything asked of us only to be on the receiving end of a hammer-blow which will do nothing to suppress the virus but will take the bingo industry to the brink of failure,” he wrote.
And in the north of England, where Rank boasts a number of casino properties, Tier 3 lockdown measures have kept their doors shut to the public – a decision that Jonathan Swaine, the managing director of Rank, described as ‘senseless’.
“At first we thought that the decisions being made were arbitrary, but it’s now clear that our casinos are being subjected to an aggressive and needless attack by decision makers who clearly understand nothing of just how safe casinos are, and appear determined to damage the land-based betting and gaming industry for the sake of it,” he said.
Meanwhile, Rank has withdrawn completely from the Belgian market after selling all of its shares in Blackenberge.
They will hand over the reigns to the Kindred Group, who have forked out £25 million for the privilege to extend their reach in Belgium, where the rules dictate that an online casino must have a land-based presence in order to be granted a licence.
Rank had casino properties in the Middlekerke region as well, but it sold those in 2017 and this signals its complete departure from another European market.