Betfair boss quits early with £6m of share options

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David Yu will leave at end of year, instead of waiting for arrival of Breon Corcoran from Paddy Power in August

David Yu, the boss of Betfair who has presided over a £500m slump in the value of the betting exchange since last year's float, is to leave the company prematurely while sitting on more than £6m of share options.

News of the early exit comes despite the company insisting last month that the chief executive would remain in place until the arrival in August of Breon Corcoran, the chief operating officer at rival Paddy Power. Instead, Yu will depart at the end of this month when chief financial officer Stephen Morana will step in as interim chief executive.

Betfair's shares, which listed at £13 in October 2010, closed on Wednesday down 2.15% at £7.96. Yu holds about £6.3m of share options at current prices that date back to 2002, when Betfair was a fledgling business and he was head of technology.

As part of his contract, he will also be awarded £430,000 in salary and a further £212,000 for the second instalment of the controversial senior executive incentive plan, which saw executives awarded large bonuses simply for floating the company.

It is not clear if Yu, who along with his wife made £5.3m in the float, plans to cash in his options immediately.

He said: "To give the best continuity for Breon coming on board it makes sense for Stephen, the other executives and the management team to lead and drive the business forward. Essentially once Breon was appointed I became a lame duck."

However, gaming analysts saw the move slightly differently. One said: "Betfair had hoped to whittle down Breon's notice period. This is Plan B."

The news of yet another pay day for Yu came as the company began to show signs that it might be finally coming to terms with life as a public company.

It reported an 182% increase in first-half pre-tax profits to £20.9m, which beat expectations, on underlying revenues up 1% at £191.3m. The decent numbers were driven by a good start to the football season and rises in the number of customers and the value of bets.

Betfair, founded 11 years ago by one-time professional gambler Andrew Black and former JP Morgan trader Edward Wray, is an intermediary between gamblers wanting to place a bet or offer odds to others. The business makes money by taking a commission on the winnings made by punters, 28% of whom made profits from betting on the website last year.