MITCH GARBER

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Financial Times: Online poker chief lands $6m sign-on fee

PartyGaming, the online poker company, is to pay new chief executive Mitch Garber a sign-on fee of $6m (£3.4m).

Mr. Garber, who starts in April, will earn a base salary of $1m and is entitled to a performance-related bonus equal to 100 per cent of his salary. In his first year with the company he will also receive an additional 7m of nil cost share options – meaning he doesn’t have to pay for them.

The company’s current share price is 127 and 3/4p, at which 7m options should be worth about £9m.

John Shepherd,, director of corporate communications, said the sign-on fee included relocation expenses for Mr. Garber and his family from Canada to Gibraltar, departure tax from Canada and payment for outstanding options he has in his former company Fire One, which processes payments for the online gaming industry, and its 76 per cent shareholder, Nasdaq-listed Optimal Group.

In his second, third and fourth years Mr. Garber is entitled to 20m performance-related share options. To quality for the 20m options, PartyGaming will have to outperform the FTSE 100 share index by 10 percent and other online gaming companies, including rival Sportingbet by 10 per cent.

The options are being awarded from a 200m share pool created by PartyGaming’s founders and intended for the company’s future and current staff.

Richard Segal, the outgoing chief executive who is quitting after less than two years because he did not want to relocate to Gibraltar, where the gaming company’s headquarters are located, was on a basic salary of £585,000 plus options worth £10m.

Mr. Shepherd said: “It it far more difficult to get qualified executives to run internet companies as it’s such a young industry. Mr. Garber’s performance targets are very tough. There is no dilution to shareholders here and no new shares are being issued.”

- By Salamander Davoudi