Tabcorp Holdings Limited (ASX: TAH) shareholders have delivered a resounding vote of confidence in CEO Gillon McLachlan’s incentive package. The approval came despite vocal opposition from the Australian Shareholders Association, which labelled the potential payout as “outlandish.”
At the company’s Annual General Meeting on 20 October 2025, more than 96% of shareholders voted in favour of McLachlan’s long-term options. The remuneration report received even stronger support, with 99% voting yes.
The Numbers Behind the Controversy
McLachlan’s compensation package has attracted scrutiny for good reason. The numbers are substantial by any measure.
AFL CEO Gillon McLachlan
The former AFL boss stands to receive 30 million options with a strike price of 47 cents. If earnings before interest and tax rise by about 10% and the share price holds at current levels around AUD 1.07, McLachlan could pocket a cash payment of AUD 18 million when the options vest in 2027.
That figure becomes even more striking when placed in context. Tabcorp’s statutory net profit this year was around AUD 36 million. McLachlan’s potential bonus would represent half the company’s entire profit.
His base salary sits at AUD 1.5 million. He already received a bonus of AUD 1.65 million in the most recent financial year.
ASA’s Strong Objection Falls on Deaf Ears
The Australian Shareholders Association pulled no punches in its criticism. The organisation singled out Tabcorp’s long-term incentive structure as “particularly egregious.”
ASA stated the use of options doesn’t align with what they consider best practice. Their concern centres on opacity and the potential for excessive payouts that far exceed typical shareholder returns.
“Their pricing is opaque and can result in outlandish payouts well in excess of the ordinary shareholder’s experience,” the ASA said in its pre-meeting statement.
The group also noted the options don’t even need to be exercised. They simply serve as a calculation basis for cash payments to executives. This approach fails to promote what ASA calls “skin-in-the-game” share accumulation that conventional schemes achieve.
ASA voted against both the remuneration report and McLachlan’s options grant. However, the voting outcome shows institutional shareholders and proxy advisers took a different view.
Share Price Performance Tells a Different Story
Investors backing McLachlan’s package can point to strong performance since his arrival. Tabcorp shares have surged more than 100% over the past year. 
Tabcorp Holdings Share Price
The stock traded as low as 39 cents before McLachlan took the reins in August 2024. It now sits around AUD 1.06, near its 52-week high of AUD 1.10.
The company has returned to modest profitability under his leadership. This represents a significant turnaround from the challenges Tabcorp faced following its 2022 demerger from The Lottery Corporation.
Trading volume on 20 October 2025 reached elevated levels as shareholders digested the AGM outcomes. The market appears comfortable with the board’s remuneration decisions.
The ASX gambling and entertainment sector has shown resilience this year, with Tabcorp emerging as a standout performer.
McLachlan’s Track Record and Strategic Goals
McLachlan brings a proven track record from his decade leading the AFL. Under his leadership, league revenues more than doubled from AUD 502 million in 2013 to AUD 1.06 billion in 2023.
He negotiated the largest sports broadcasting rights deal in Australian history. He also oversaw the AFL’s expansion to 18 teams and launched the AFL Women’s competition.
At Tabcorp, McLachlan has made the national tote initiative a key strategic goal. The project aims to unify Australia’s three different tote systems into one parimutuel pool.
“At last year’s AGM I said I supported a national tote. We are seeking to deliver it,” McLachlan told shareholders at the meeting. “We’re engaging with state racing bodies, and I remain optimistic we can make a national tote a reality in FY26.”
The unified tote would benefit the industry, customers, and TAB, according to McLachlan. Negotiations with state racing bodies continue, with a target completion date by the end of FY26.
The Broader Executive Pay Debate
Tabcorp isn’t alone in facing shareholder scrutiny over executive compensation. Australian companies have seen increasing pushback on remuneration packages in recent years.
The challenge for boards lies in balancing the need to attract and retain top talent with shareholder expectations around appropriate reward levels. Options packages create particular tension because of their leveraged nature.
When share prices rise significantly, as Tabcorp’s has, options can deliver outsized returns compared to what ordinary shareholders experience. A shareholder who bought at 50 cents and sold at AUD 1.00 doubles their money. An executive with options struck at 47 cents sees a much larger multiple on the spread.
ASA’s criticism reflects this fundamental tension. They argue the disconnect between executive and shareholder experience grows too large with options-based schemes.
Corporate governance experts note similar debates have emerged across the ASX as boards navigate challenging market conditions and evolving shareholder expectations.
What the Vote Reveals About Corporate Governance
The 96% approval rate at Tabcorp’s AGM demonstrates how corporate voting really works in practice. While ASA represents retail shareholder interests, institutional investors control the bulk of voting power.
Recent leadership changes across ASX-listed companies have shown similar patterns. Boards face mounting pressure to balance competitive executive packages with shareholder expectations.
These larger shareholders typically take a more pragmatic view. They weigh performance against compensation. McLachlan’s delivery of strong share price returns and the company’s return to profitability appears to have satisfied them.
Director Raelene Murphy, who was re-elected at the meeting, captured the mood shift at Tabcorp. The company has moved from crisis management to growth mode under new leadership.
The voting outcome also highlights a broader pattern in Australian corporate governance. Retail shareholders who collectively own significant stakes often don’t vote at all. Those who do vote tend to own smaller parcels than institutional holders.
Looking Ahead
McLachlan’s time at Tabcorp has featured significant strategic initiatives beyond executive compensation debates. The company completed a major licensing deal in 2024 that reshaped its Victorian operations.
Queensland reforms have also contributed to improved trading conditions. The company is working on relationship improvements with the New South Wales government and Racing NSW.
Retail operations have seen renewed focus. Tabcorp has renegotiated venue terms and launched initiatives like Tab Time to improve customer engagement.
The company’s capital expenditure for the current year is forecast at AUD 120-140 million. Depreciation will run at AUD 215-225 million. The new Victorian licence will benefit earnings for a full 12 months in FY26, compared to 10.5 months in FY25.
Consensus estimates call for revenue to reach AUD 2.7 billion with EBITDA of AUD 392 million. These figures represent modest growth on recent results.
Also Read: Droneshield’s Explosive Third Quarter Revenue Decoded
Frequently Asked Questions
Q: How much could Gillon McLachlan earn from his Tabcorp bonus?
A: McLachlan could receive up to AUD 18 million when his options vest in 2027, provided Tabcorp’s earnings rise by about 10% and the share price maintains current levels around AUD 1.07.
Q: What percentage of shareholders voted in favour of the bonus plan?
A: More than 96% of shareholders voted in favour of McLachlan’s long-term incentive options at the 20 October 2025 AGM. The remuneration report received 99% approval.
Q: Why did the Australian Shareholders Association oppose the package?
A: ASA called the package “outlandish” because options can deliver outsized returns compared to ordinary shareholders. They argue the structure lacks transparency and doesn’t promote executives holding shares long-term.
Q: How has Tabcorp performed under McLachlan’s leadership?
A: Tabcorp shares have risen more than 100% since McLachlan took over in August 2024, climbing from 39 cents to around AUD 1.06. The company returned to modest profitability after years of challenges.
Q: What are the key conditions for McLachlan’s bonus payout?
A: The options have a strike price of 47 cents. McLachlan would benefit if the share price remains above this level and the company achieves specified earnings targets by 2027.
