Wouldn’t it be a good idea if companies could pay their CEO’s and senior managers in a way that reflected their businesses.

For example a media company, say in television, could pay the CEO according to how the channel rated each year, not how much money it made. A food company could pay its CEO on how the stuff it produced tasted, wine companies the same.

This digression is leading me to the gambling giant, Tabcorp (which also styles itself as an entertainment giant. No, Tabcorp, you are a gambling business with entertainment there to try and get people to lose more at your machines, tables or punting on horses and sports. Entertainment is ancillary, a bit of corporate spin and gloss to soften the image of the company as a gaming clip joint.

Wouldn’t it be a good idea if the senior management could be paid the way people put money through Tabcorp’s pokies or gaming tables, on the ‘red hots’ or the ponies. You start with a kitty or stake and then proceed to bet. At the end of an afternoon or evening’s activities (or a year of designated gambling), CEO Matthew Slatter and his team could keep whatever they had made using the companies products and services during the designated period of time.

None of this rubbish about performance hurdles and the like, just subject them to sorts of experiences of their customers and pay them according.

If fact Tabcorp, which boasts of its commitment to “Responsible Gambling” could trumpet that its executive practice what they preach. They are paid by gambling responsibility and share the joys and pain of the hundreds of thousand of people who use its products every day.

In the same vein you could pay PBL in a similar manner based on Crown or Burswood, or on the non-receipt of subscribed for magazines from the ACP magazines division. It would add a bit of drama to the vagaries of earning bonuses and short and long term incentives!

The reason for this rave is that according to the 2004 annual report, Matthew Slater had a very nice pay packet and one that he obviously kept away from his gaming tables or Tabs.

Matty received $3.10 million, up more than 320 thousand dollars on the previous year’s $2.677 million. How much is enough?

Better odds than gaming or betting on the horses, and a better return than investing in bonds. Nice one Matty. And to think he earned all that loot for running a company that essentially a fancy tax agent for various governments and has a monopoly in certain gambling lines in Victoria, NSW (Sydney) and on the Gold Coast.

Matty’s base salary was $1.40 million (enough on its own, you’d think), but his stocking was stuffed with a $588,000 cash incentive (brown bags anyone?) and another $588,000 worth of deferred shares. There was a bit of super, FBT, $89,000 or so in loans and options and shares worth $409,667. Verrry nice!

Its a big change in the mix from 2003 when Matty was paid a mere $778,682 in base salary(so that almost doubled!) with only $175,000 in performance pay, obviously not such a big deal a year or so ago.

The big item in 2003 was the $1.615 million in shares and options, which have risen very nicely thank you following the long bid for the NSW TAB which was ultimately successful, as well as the Jupiter’s takeover which was also a good deal for Tabcorp

Elsewhere on the board chairman Michael Robinson received a pay rise, up from $286,769 to$362,970. Fellow director Tony Hodgson also did better, his pay rose from $170,519 to $210,643.

The annual report also shows big pay rises for the senior executives of Tabcorp with the head of casinos, David Banks receiving $1.472 million in 2004, compared to $912,798.Ask him to put it all on the red at roulette or to bet against the house and see how confident he is in the businesses he runs!

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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