Denise Coates, chief executive of Bet365, remains one of the highest paid executives globally despite having her record-breaking pay package cut for the second successive year, as the UK gambling group suffers a sharp fall in profits after spending heavily in the fight for new customers worldwide.
Coates, who ranks among the UK’s highest taxpayers, was awarded a salary of £213mn in the year to the end of March 2022, according to accounts published late on Thursday.
The executive, who founded the company from a makeshift office in a Stoke-on-Trent car park more than two decades ago, also received a minimum 50 per cent share of a £100mn dividend paid to Bet365’s four directors, taking her total pay to at least £263mn. John Coates, Denise’s brother, serves as co-chief executive, while her father Peter Coates is the company’s chair.
The £260mn-plus pay packet is 16 times higher than that of the best paid FTSE 100 chief executive Sébastien de Montessus of Endeavour Mining. It is only outstripped by 10 US executives, including Tim Cook of Apple and Elon Musk of Tesla. Musk was paid around $10bn in option awards by Tesla last year, according to Bloomberg.
Nevertheless this year’s windfall still represents a second pay cut for Coates, who is widely understood to be the “highest-paid director” cited in Bet365’s accounts. She has received nearly £1bn from Bet365 over the past three years: her salary peaked at £421mn the year before the pandemic, while last year she was paid £298mn in salary and dividends.
The reduction in pay came as pre-tax profits at Bet365 fell around 90 per cent year on year to £49mn, their lowest level since 2008. The company blamed the drop in profits on a £320mn increase in “administration expenses” driven by marketing costs related to launching in new markets and spending on IT infrastructure and technology to expand the business.
Bet365 also hired an additional 649 employees over the period, taking the total staff base to 6,092 workers. The company booked a £26.2mn loss from its ownership of Stoke City Football Club.
Paul Leyland, an analyst at Regulus Partners, said Bet365 was having to “fight harder” to acquire new customers because of increased local competition in new markets. The company now operates in 18 local markets worldwide, having recently launched in the Netherlands, the US state of Colorado and Ontario in Canada.
“During the first stage of the pandemic, existing customers had more time and more money to bet online, so Bet365 benefited from increasing gross margins without much cost increase,” said Leyland. But in the most recent financial year, Bet365 “had to increase marketing budgets to win lower-spending users in emerging markets”.
Revenues grew by 2 per cent to £2.87bn during the period, while the number of active customers increased by 48 per cent. Leyland estimated that average revenue per user fell by around 30 per cent.
Bet365 declined to comment.