Wynn reduces top executives’ salary to pay employees while casinos remain closed

Amid the global health crisis generated by the COVID-19 pandemic, and following the announcement that all U.S. commercial casinos will be closed as of today, Wynn Resorts has decided to continue paying its employees to retain them.

"I learned a lesson from the financial crisis in 2008," CEO Matt Maddox told CNBC in an interview published Tuesday. "It pays off in the long run to retain employees, even if it costs the company in the short run."

Wynn also issued a statement Tuesday explaining it would reduce executive salaries in exchange for shares of Wynn stock. "The Board of Directors and top executives at Wynn Resorts have agreed to forego between 33% and 100% of their salary for the remainder of 2020 in exchange for shares."

In accordance with the statement, Maddox agreed to forego 100% of his salary in exchange for shares for the remainder of the year. "The cash savings arising from the executive salary reductions will be used to offset ongoing employee payroll and other expenses."

While many employees in other gambling companies have been laid off and some others have been promised a couple of weeks pay, the company announced last week it would pay all of its employees, including their average tips, after it closed its resorts in Boston and Las Vegas to help reduce community spread of the virus, even before Nevada’s governor ordered them shut for 30 days.

"I can’t imagine going out (to) rehire and retrain 13,000 people. I’d rather keep the knowledge and experience that we have now in the service standards," Maddox told CNBC.

In February, the government of Macau ordered all gaming facilities to suspend casino operations for 15 days and ordered the casinos to continue paying employees. In an earnings call, Maddox revealed Wynn Resorts was spending as much as $2.6 million every day during the Macau shutdown, most of it on salaries.

In Nevada, it’s the Wild West when it comes to supporting for tens of thousands of hourly workers. Las Vegas Sands the owner of The Venetian and the Palazzo, has said it will pay its workers without putting a time limit on how long, CNBC reports. MGM Resorts said it will pay its furloughed workers for two weeks, but it has already laid off many. Caesars Entertainment also said it has had to furlough workers since its properties were ordered shut.

Maddox points out the loyalty a move like continuing to pay workers engenders in employees. "We’re known as the best place in Las Vegas for service, for experience," he says. "I want our employees to be happy to be there, because if they’re happy, you’ll be happy and our shareholders will, too."

Although Wynn Resorts has committed to paying its employees, including tipped and hourly workers, that commitment is for 30 days. "We have a runway, but every day we’re thinking about where we can save money," Maddox said.

Maddox is also lobbying representatives in Congress for aid in the form of loans. "We should be able to borrow money to pay salaries and wages of our line-level staff and healthcare benefits. And then, once we’re reopened and out of this, we should pay it back."

And if there’s a glimmer of hope, Maddox points to the “Get Back to Work” message in China. Nearly all employees are back on the job at Wynn’s properties in Macau. 

Even though ferries aren’t running, tourist visas are not yet being issued and visitation is ten percent of what it was previously, Maddox says there’s an emotional shift: "Sure, the economy’s fallen on tough times, but there’s a sense of optimism that they’ve made it through."