It’s a tough life being a CEO sometimes.
Take yesterday, At least four terminated in Australia and New Zealand or deciding to leave their companies large and small.
The biggest surprise was the ‘termination’ of Tabcorp CEO, Matthew Slatter.
Despite there being names on the surprise press release, it was a case of heading for their mail boxes while they sorted out who was important to talk to among shareholders and others. The information flow was minimal.
As to why, not much in the way of positive information for such a brutal sacking.
Three weeks ago Tabcorp revealed a 22 per cent fall in earnings because of poor returns from its Casinos in Sydney and Queensland.
The Queensland casinos suffered from smoking bans: NSW already have bans in place in some areas.
And figures from the Queensland Government also showed that returns from electronic gaming machines were down in January and February to the tune of more than 7 per cent on a year ago.
Figures for the Gold Coast showed the biggest fall and that’s where the Jupiter’s Casino is based, so bad news.
Did this do it for Mr Slatter?
Returns from the NSW TAB were also down, more money (around $50 million) was being spent improving outlets and integrating the punting systems in both states (Victoria).
Although a shock, it was more that for the wording of the announcement and the admission of Mr Slatter’s “termination”. You don’t see that very often these days.
Slatter had been under pressure since the ACCC rejected Tabcorp’s attempt to takeover UniTab of Queensland, which instead merged with Tattersall’s of Melbourne.
In the wake of the rejection festering problems in the casinos in NSW and Queensland and in the NSW TAB appeared, forcing the company to cut jobs and into damage control of write downs and more spending on new computer systems and better facilities.
Then the interim profit appeared and shocked shareholders with a 22% downturn in earnings because of falling profit margins and poor returns from events like the Melbourne Spring racing Carnival, the biggest betting event of the year. the Victorian gaming business did OK, the NSW TAB didn’t.
Major shareholders, such as Investors Mutual and 451 Capital criticised the company and Mr Slatter in the wake of the result and told him he had six months to fix the problems. Perpetual was another big shareholder concerned about the company’s direction.
If you had to pick one factor, it would have been this aggro from the instos about Mr Slatter.
Then there’s the question of the licence for the Star City casino in Sydney which is up for renewal in September. The NSW election has intervened otherwise it would be done by now. There have been reports James Packer’s PBL is pressuring the Labor Government to give PBL the licence instead of Tabcorp.
But whatever it was the statement was pretty direct:
“Mr Slatter will leave the company today,” the Tabcorp statement said.
“He will be paid up until today’s termination, and will receive other entitlements in line with his contract.”
Of course Mr Slatter will receive a payment: this one of $3.21 million, a year’s salary in lieu of notice plus an annualised component of his Long Term Incentive Scheme. The company said he must pay back within 90 days a loan of $5.9 million funded by Tabcorp earlier to purchase shares in the company.
And on a day the market was unsettled by the fall on Wall Street it wasn’t the best of timing for such an announcement but TAH got off a bit lightly with the shares down just 16 at $16.99 after falling by 33c at one stage.
Perhaps it was a case of investors being more relieved he was gone rather than shocked into a sell-off.
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Meanwhile platinum producer Zimplats Holdings lost its long time CEO, Greg Sebborn, yesterday.
Not in the wilds of Southern Africa or Perth, but with regret, as the statement from the company said.
A very different situation to that at Tabcorp.
In the statement, Zimplats said it had accepted Mr Sebborn’s resignation with regret.
“Greg has made a valuable contribution to the company over many years,” the statement said.
“His fellow directors and management thank him and wish him well for the future.”
Zimplats said it would announce a successor in due course but Mr Sebborn has worked with the company since 1998 and will stay on as a non-executive director.
Zimplats produces platinum and associated metals in Zimbabwe.
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For Melbourne based Verticon Group (VGP), it seems to have been another story again:
It provides tower cranes (primarily electrical) and hires material hoists into the building and construction industry
CEO, Rob Lockett, said yesterday in a statement that he would be leaving the Group soon as he had decided to pursue other career opportunities.
“While I have been with Verticon for only a short time, I believe the group is strategically well-placed to move forward and I wish the Board, management and staff every success in the future,” Mr Lockett said in the statement.
He had been appointed just last June, so didn’t spend very long in the CEO’s position.
Perhaps the answer to this departure can be found in this announcement on February 22:
“The Verticon Group today announced a $6.93 million loss for the six months ended 31 December 2006, which included an $8.22 million write down in non revenue earning plant and equipment identified in an extensive review of the company’s operations in Australia and New Zealand.
“Verticon estimates that it will incur a loss of about $9.7 million for the year to the end of June 2007 which includes the plant and equipment write down.
“The Managing Director of Verticon, Rob Lockett, said the write down followed a “line by line” review of the business operations. The revie
