Ex-SkyCity managing director has $7m in options
A report in NZ’s The Dominion says that departed SkyCity Entertainment Group managing director Evan Davies, already in line for a $1.7 million payout, stands to top this up with a further $7 million if he cashes in his share options.
ABN Amro analyst Carolyn Holmes said yesterday that Mr Davies, who left SkyCity with immediate effect on Monday, held a swathe of options due to expire on September 10.
Ms Holmes calculated they would convert into 4.7 million shares, providing Mr Davies with a book profit of $7 million.
Mr Davies, in his late forties, holds the options as part of executive share option plans approved by SkyCity’s shareholders.
SkyCity chairman Rod McGeoch said Mr Davies, as SkyCity’s managing director and driving force since before the Auckland casino opened in 1996, had earned the options.
As part of his employment contract, Mr Davies, now on an overseas holiday, receives a $1.7 million termination payment.
He was paid $1.3 million last year and also holds 453,643 shares, worth more than $2.3 million at yesterday’s prices.
SkyCity has engaged executive search company Heidrick & Struggles to find a new managing director and two new directors.
It has appointed SkyCity director and former New Zealand Post chief executive Elmar Toime as executive director for at least three months.
Mr McGeoch also responded to investor and analyst criticism yesterday that Mr Toime’s appointment showed a lack of succession planning.
He said David Sullivan, SkyCity’s general manager of group finance, could not temporarily fill Mr Davies’ boots because he had yet to receive regulatory approval to run a casino, which SkyCity’s directors had.
Mr Davies’ estranged wife, Heather Shotter, who quit as SkyCity’s general manager of group marketing and New Zealand operations last year, would have been the other management candidate to take on the role, Mr McGeoch said.
Questions have also been asked as to why SkyCity is looking to add an extra director to its six-member board.
Mr McGeoch said SkyCity had been looking for a new director with gaming experience for some time and Rob McLeod’s decision to resign, effective June 30, had been a surprise.
SkyCity now also needed a new director with financial expertise. “I don’t think you’ll see some of our longer serving directors going on much longer,” Mr McGeoch said.
Mr Toime would be implementing initiatives developed by Mr Davies and putting new ones to the board, he said.
“Companies are expected to be on a course of continuous improvement and we’re not into a holding pattern here.”
Mr Toime was not a contender to permanently replace Mr Davies.
A strategic review outlined by SkyCity in May highlighted potential asset sales including the Adelaide Casino, Sky’s 40.5 per cent stake in Christchurch Casino and SkyCity Cinemas.
But Mr McGeoch said no decision had yet been made to sell anything.
Citigroup analyst Andy Bowley estimated the cinemas, Adelaide Casino and the Christchurch stake could fetch $550 million.
Report by The Dominion Post
John Alwyn-Jones
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