Paddy Power chief sees pay rise 30%

New Paddy Power chief executive Andy McCue has seen his base annual salary jump by nearly 30%, to €700,000, since taking over from Patrick Kennedy, at the helm of the betting services company earlier this year.

Mr McCue, who previously headed up the company’s retail and online strategy across its core geographical markets of Ireland and the UK, was named as CEO in September. According to the company’s newly-published annual report, Mr McCue’s base salary jumped 27%, from €550,000 to €700,000, on the back of his move.

Mr Kennedy’s base salary amounted to €780,000 last year, his final year in charge after a near decade-long tenure which saw him oversee the company’s growth from a domestic player into a successful international gaming group and help grow profits from €31m to €141m.

Paddy Power’s chief financial officer, Cormac McCarthy, saw his annual base salary inch up by €10,000 to €520,000 for the current year, according to the latest annual report.

It’s not just Paddy Power’s executives who are coining it, at present. The company, last month, announced plans to return €392m of surplus cash to shareholders, as it opts for an organic growth, rather than acquisition-led strategy.

That plan is set to be voted on at next month’s AGM; but already analysts have suggested it may be the first of numerous cash returns over the coming years.

Davy Stockbrokers said, at the end of last month, it expects Paddy Power to return up to €800m in surplus cash — via ordinary or special dividend payments — in the coming years.

“Based on our forecasts, should Paddy Power raise debt at the end of 2016, to correspond to its new target gearing level, we estimate it could return nearly €800m over two years, between ordinary and special dividends. That equates to 21% of its current market capitalisation,” said Davy’s David Jennings in his company’s report into the betting sector.

Mr Jennings said the recently announced capital return plan is unlikely to be a once-off move.

“Given the strong ongoing cash generation of the group, further returns are likely — especially if the sector continues to offer a shortage of acquisition opportunities at reasonable valuations.”