Tabcorp Holdings, Australia's biggest gaming group, dumped its chief executive, bowing to investor pressure after the company reported disappointing half-year earnings.
Tabcorp said Matthew Slatter, who has been chief since 2002, would step down immediately. Senior executive Elmer Funke Kupper will fill in while the company looks for a replacement.
Analysts said Funke Kupper, a former senior executive at Australia and New Zealand Banking Group, was the favorite to replace Slatter, 49, but a management change would not necessarily rewind Tabcorp's recent poor performance.
"The company has been moving to this idea it's all about customer strategy and that would be consistent appointing him into that role. Whether it will make any difference to their performance is another question," Commonwealth Securities analyst Craig Shepherd said. "The first-half performance had a lot of real concerns in it, also in terms of the way the company had been run over the previous three years."
Tabcorp gave no reason for Slatter's departure, but the change followed weaker-than- expected first-half earnings, several failed bids to expand through acquisitions or joint ventures, and criticism by fund managers about executive bonuses.
Melbourne-based Tabcorp, which owns four of Australia's 13 casinos, missed market forecasts when posting lower first-half earnings last month, partly due to smoking bans in casinos.
Slatter had also ruled out major acquisitions for at least 18 months, a major shift from his previous strategy.
The group had recently been in talks with Richard Branson's Virgin Group about a casino and resort development project in Macau and bid unsuccessfully for UNiTAB, which merged with Australia's top lottery operator Tattersall's.
Some fund managers had criticized Tabcorp over its earnings and senior executive bonus payments, according to local media. Chairman Michael Robinson said the company would conduct a search for candidates internally and externally.
He said Slatter, formerly chief financial officer at AXA Asia Pacific Holdings, had grown Tabcorp in the past five years and praised the group's acquisitions of Jupiters and Tab in that period. "In the next stage of our development, our focus is on making our existing assets deliver their full potential," he said in a statement.
Slatter will receive A$3.21 million (US$2.5 million), including 12 months compensation in lieu of notice plus long-term incentive payments. He must also repay a A$5.9 million loan received under the company's senior executive incentive plan.