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Flutter Entertainment plc (NYSE:FLUT) has amended the employment contract of its CEO, Peter Jackson, effective August 19, 2024, in line with the company's primary US listing and the relocation of its operational headquarters to the US. The adjustments include a salary reduction and changes to bonus and equity compensation structures.
According to the 8-K filing with the Securities and Exchange Commission, Jackson's total salary will decrease by approximately 13.5% to $1,390,000, reflecting a shift to a US dollar-based salary. Despite the salary cut, his annual cash bonus potential for 2025 will increase, with the possibility of earning up to 400% of his total salary at maximum performance levels, compared to the unchanged bonus opportunity for 2024.
Jackson also received equity awards on August 19, consisting of restricted share units (RSUs) and performance share units (PSUs) with grant date fair values of 200% and up to 1200% of his total salary, respectively. The RSUs vest over three years, while the PSUs have a three-year cliff vesting period subject to performance targets.
Further changes include a reduction in pension contributions from 9% to 5% of total salary and an increase in Jackson's shareholding requirement from 500% to 600% of his salary. Flutter will cover costs for personal tax return support and advice related to his employment.
The 8-K filing also disclosed the grant of equity awards to Flutter's Non-Executive Directors, as per the announcements made via the Regulatory News Service in London to comply with the United Kingdom Financial Conduct Authority’s rules.
The information for this article is based on a press release statement.
In other recent news, Flutter Entertainment has seen significant developments in its financial performance and strategic initiatives. Following robust second-quarter financial results, with revenue rising 20% to $3,611 million and adjusted EBITDA reaching £738 million, up 17%, several firms have revised their price targets for the company.
UBS has increased its price target to GBP222.00, maintaining a Buy rating.
Analysts from UBS predict that by fiscal year 2025, Flutter Entertainment is expected to generate approximately $2 billion in adjusted free cash flow and reduce its leverage ratio to 0.97 times. The firm also foresees significant leverage headroom for the company, estimated to be worth between 11% to 16% of its current market capitalization by fiscal year 2025.
Furthermore, Oppenheimer, BTIG, and Morgan Stanley have all expressed positive outlooks for Flutter Entertainment's future. They cite favorable market conditions, the potential for further upward revisions in key markets, and several upcoming catalysts that could enhance the company's financial performance.
Moreover, Flutter Entertainment is in discussions to acquire the Snaitech business from Playtech (LON:PTEC), potentially expanding its footprint in the European market. However, the acquisition is still in preliminary stages and no definitive agreement has been reached so far.
These developments highlight recent progress in Flutter Entertainment's financial performance and strategic initiatives.
InvestingPro Insights
As Flutter Entertainment plc (NYSE:FLUT) navigates through its strategic changes, including CEO Peter Jackson's amended employment contract and the company's operational shift to the US, it's important for investors to consider the latest financial metrics and analyst insights. According to InvestingPro data, Flutter Entertainment has a market capitalization of $36.9 billion, reflecting its significant presence in the entertainment industry.
InvestingPro Tips indicate that analysts expect net income growth for Flutter this year, which aligns with the company's performance incentives laid out in Jackson's new contract. However, it's worth noting that three analysts have recently revised their earnings expectations downwards for the upcoming period, suggesting that investors should keep an eye on forthcoming performance reports. Despite these revisions, the company has experienced a significant return over the last week, with a price total return of 8.92%.
For those considering a deeper dive into Flutter's financial health, InvestingPro offers additional insights. The company's recent revenue growth of 16.28% in the last twelve months as of Q2 2024 and a gross profit margin of 47.22% demonstrate its ability to generate substantial earnings. Yet, with a negative P/E ratio of -32.77 and a high valuation multiple on EBIT and EBITDA, investors should be cautious about the company's current valuation in relation to its earnings.
For further strategic analysis and a full list of additional InvestingPro Tips, interested parties can visit https://www.investing.com/pro/FLUT. This resource provides a comprehensive look at Flutter's financials and market position, offering valuable information for making informed investment decisions.
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