Plus500 to Vote on Executive Pay Increase Despite Shareholder Unrest

Shareholders of Israeli-based, but London-stock market listed Plus500 are set to vote on a compensation improve for the CFDs provider’s senior executives. The broker is holding a vote on February 20 on a proposed bounty increase for Asaf Elimelech and Elad Even-Chen, Plus500’s CEO, and chief finance officer, respectively.

Plus500’s executives are due for a big increase. 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.

“The service contract fees of Mr Elimelech and Mr Even-Chen are below the lower quartile for comparably sized UK companies and FTSE 250 companies and are maintained at these low levels in line with the Company’s philosophy of “low fixed/high variable pay potential” which ensures that total remuneration levels are fully aligned with performance and shareholder interest,” the company noted in a regulatory filing.

The eye-watering salaries, which includes an extra reward of $285,000 for each based on their long-term incentive plan (LTIP), were revealed as Plus500 said it expects to report revenue of around $354 million and an EBITDA of approximately $190 million in 2019. Although the latest trading update shows considerably healthy results, considering earnings reports from competitors, the company’s projected revenue is much less than the record $720.4 million achieved in 2018.

The CEO and CFO bonuses, however, may have added insult to injury for shareholders already nursing losses. Although they beefed up the bosses’ rewards, investors saw little benefit as the stock slipped more than 40 percent over the course of the year.

Plus500 shareholders delivered a blow to its board last year when 48 percent voted against the executive pay, although the vote passed due to the backing of the majority shareholder.

Plus500 and other CFDs brokers have had a tough time of late and saw revenues being squeezed by the EU regulators’ crackdown on risky spread betting and similar products.

In addition, ASIC’s proposed regulatory updates, which includes leverage limits, margin closeout rules, and Negative Balance protection, is anticipated to affect Plus500’s profit from its Australian customers, which accounted for 15 percent of the broker’s revenues in H1 2019.

Plus500 shares closed higher one percent on Tuesday at 911 pence per share in London. In August 2018, the stock surged to 2,040.00 pence, the highest level since the Haifa-based firm first sold shares to the public in 2013, as revenue more than tripled amid an explosive interest in its products tied to Cryptocurrencies .

Plus500 shareholders delivered a blow to its board last year when 48 percent voted against the executive pay, although the vote passed due to the backing of the majority shareholder.

Plus500 and other CFDs brokers have had a tough time of late and saw revenues being squeezed by the EU regulators’ crackdown on risky spread betting and similar products.