Plus500 directors have seemingly angered the spread better’s investors by ramping up the potential pay of its finance chief by more than £1.2 million for his efforts in resolving a tax issue in Israel.
The Israeli-based broker, which is listed on the FTSE 250 Index, today posted the results of its annual general meeting that took place earlier today. Among other things, Plus500 said it withdrew the ‘Resolution 17’ which sought to get approval for a special bonus for Elad Even-Chen, the broker’s executive director and chief financial officer.
The one-off cash payment was proposed to reward Elad for his ‘extraordinary contribution and commitment’ over a number of years to obtain ‘an unprecedented and highly beneficial approval’ from the Israeli tax authorities. This relief, says the regulatory filing, has provided Plus500 with a reduced tax liability that would save over $100 million for shareholders.
Plus500 said it would engage with investors to understand their feedback and discuss their concerns. The business will put the proposed bonus to a new vote when it calls the next meeting of its shareholders later this year.
The statement further details: “While many of the Company’s major shareholders were supportive of this achievement and the related resolution, some shareholders had expressed concerns. The Board and the Remuneration Committee consider that a bonus is appropriate given the outstanding efforts of Mr Even-Chen. Consequently, the Company will further engage with these shareholders to ensure their concerns are considered ahead of the resolution being proposed to shareholders again at an EGM to be convened later this year to cover the remuneration of the Company’s Directors for 2021 (as the Company is required to do under Israeli Law).”
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Shareholder Rebellion over Executive Pay Packages
Even without the add-ons that Plus500 stockholders might not decide to award, the two top directors could receive more than £4.0 million each if they hit targets.
Earlier in February, the shareholders of London-stock market listed firm voted on an improvement in compensation for both Even-Chen and Plus500’s CEO, Asaf Elimelech, who then resigned from the company in April after four years at the helm.
The new policy includes raising the maximum potential annual bonus for the executive directors to over $1.9 million each in 2020. This is in addition to their yearly salary of $485,000 and up to $2.1 million from a share appreciation right, depending on how much Plus 500’s shares climb over that period.
The eye-watering salaries were revealed as Plus500 said the strong performance achieved by the broker in the first six months of the year has continued in the second half. Although the latest trading update shows considerably healthy forecasts, Plus500 shares closed at lower than one percent on Wednesday at 1483 pence per share in London.
Elsewhere, Plus500’s chairwoman, Penelope Judd faced a slight shareholder rebellion at their annual meeting as nearly 16 percent of votes were cast against her re-election.