Crown Casino shows corporate Australia still doesn't get it on excessive pay
Saturday 25th January 2020
Related Story: Crown Casino sued over share price collapse following arrests in China
It was straight from the public relations playbook.
If you've got bad news to release, do it on a Friday afternoon.
And if it's the Friday before a long weekend, even better.
More chance for that bad news to be buried.
And so it was with Crown Resorts, the operator of casinos in Melbourne, Perth, London and coming soon, Sydney.
However, the shiny new casino being built on the shores of Sydney Harbour is looking increasingly shaky thanks to a Chinese Government crackdown on wealthy gamblers leaving its shores.
There are allegations of links between organised crime gangs and the junket operators who bring the rich high rollers to Australia to gamble at Crown's tables.
James Packer's attempt to sell his stake in Crown has been stalled by an inquiry by the NSW Independent Liquor and Gaming Authority, while it investigates Mr Packer's preferred buyer, fellow gaming mogul, Lawrence Ho.
Mr Ho is the son of Stanley Ho, an even bigger casino mogul, who's long been accused of having deep connections to Asia's triad gangs.
Crown's latest profit result saw earnings slump 28 per cent, with its high-roller business, the engine room of the operation, down by nearly half.
It's been a difficult time of late for Crown.
Against that background, it's no real surprise that Crown would make big changes to try to put its woes behind it.
Under pressure from shareholders, Crown is bringing its management structure into line with accepted norms, separating the role of CEO and chairman.
Long-time Packer protege, John Alexander, is stepping down as executive chairman.
The chairman's role will be taken by former Liberal senator Helen Coonan, while chief financial officer Ken Barton becomes CEO.
Mr Alexander will stay on as executive director for a year, in Crown's words, "to assist with the transition of the chair and CEO roles".
For his trouble, Mr Alexander will be paid $3.5 million.
That's $3.5 million to help the new chair and CEO settle into their new roles.
Really? Is Crown seriously suggesting that's a 12-month job?
How many other companies do that?
It's reminiscent of the $5 million 'succession bonus' a decade ago for former Leighton Holdings boss Wal King, simply to identify the next CEO.
Crown says, "no payments were received by Mr Alexander on termination of his contract of employment as executive chairman".
However, according to Crown's Remuneration Report, Mr Alexander is entitled to 12 months' notice, and it's hard to escape the conclusion that his new role is in lieu of that.
To cut to the chase, Mr Alexander is not stepping down because Crown's performance has shot the lights out under his stewardship.
Along with the problems mentioned above, at $12.04, Friday's closing share price was only 14 cents higher than January 2015.
Yet Mr Alexander has been guaranteed millions of dollars.
Crown's announcement comes just weeks after Westpac sacked CEO Brian Hartzer over the bank's many thousands of breaches of money laundering laws which saw it linked to paedophiles.
He walked out the door with nearly $3 million.
What Crown and Westpac have shown is that it's still one rule for the boys and girls at the top, and another for everyone else.
While they lavish themselves with riches, those down the chain who leave can struggle to go with just a few weeks' pay.