Why FitzGerald had to quit Intertain

Why FitzGerald had to quit Intertain

Tuesday, February 23, 2016 Totally Gaming
John Kennedy FitzGerald believes the Jackpotjoy owner needs a different type of CEO

Intertain is looking for a new chief executive after John Kennedy FitzGerald elected to step down following a troubled few months for the bingo operator.

The Canada-based owner of Jackpotjoy and Vera&John was heavily criticised in a report by investment group Spruce Point Capital Management towards the end of 2015, and commissioned an independent review.

The investigation has now been completed, and while the Toronto-listed company said that the committee found Spruce Capital’s claims about the business to be “grossly erroneous”, two of the major focuses for criticism – FitzGerald himself and the Management Incentive Plan – have been addressed with the chief executive’s resignation and the abandonment of the controversial scheme. The company said that management changes at its Intertain Bahamas arm and the improvement of corporate processes are also to be actioned.

Spruce Point did not wish to comment on the developments when approached by TotallyGaming.com.

FitzGerald himself, according to an Intertain statement, suggested a change of leadership as the “central focus of the chief executive will change from asset acquisition to operational excellence”. He added: “The board should pursue a process for the recruitment of a new chief executive officer with this demonstrated skill competency.”

Stan Dunford, Intertain’s chairman, said: “While the past few months have been hard for all of us, the strengthening of our management ranks for our growing and more complicated business, the recruitment of additional board skillsets to help strengthen our governance oversight and ultimately the addition of a CEO with a focus on operational excellence will all contribute to a better Intertain.”

Intertain’s board agreed with FitzGerald’s statement and will now undertake a recruitment process for an “operationally-focused” chief executive, with a focus on candidates in European cities closer to the company’s core operations. 

The company added that the Management Incentive Plan, which awarded FitzGerald and chief financial officer Keith Laslop a fee equal to two per cent of each of Intertain’s acquisitions, has now been abandoned, with the executives “having voluntarily agreed to relinquish any right to any future payments”. Laslop is also departing his post to join the management of Intertain Bahamas.

“Keith and I are extremely proud of the quality of the businesses owned by Intertain and the transactions which have created Intertain,” FitzGerald said. “We recognise the market concern about the potential magnitude of future payment obligations and we and the board also heard our shareholders regarding the Management Incentive Plan.

“We offered to permanently cancel the Management Incentive Plan and materially reduce our entitlements to further strengthen our alignment with shareholder interests.”

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