International edition
September 25, 2020

Its CEO reported total compensation of us$ 8.4 million

Wynn Resorts executives among the highest paid in Las Vegas

(US).- Although officials with MGM Mirage, Harrah’s Entertainment, Las Vegas Sands and Station Casinos have topped the list in previous years, Steve Wynn earns this year’s Number 1 spot. The Wynn Resorts CEO reported total compensation of us$ 8.4 million, including a salary of us$ 3 million.

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ith business volume in Las Vegas retreating to 2004 levels, compensation packages for the area’s highest-paid executives last year sunk to 2001 levels as incentive pay and stock-based compensation dried up in the recession.

The 2009 executive compensation figures are a dramatic change from the boom years in Las Vegas, when casino pay packages, fueled by rapid industry growth and unprecedented stock gains, were among the nation’s highest. And yet several casino giants found ways to reward executives amid the downturn, saying bosses deserved incentives for doing their best to counteract deteriorating economic conditions outside their control.

The usual casino chiefs top this year’s list of the highest paid executives of public companies in Southern Nevada, although they earned millions, and in some cases, tens of millions, less in 2009 than the previous year, according to an analysis of recent Securities and Exchange Commission filings by Ulf Buchholz, research director of In Business Las Vegas, a sister publication of the Las Vegas Sun.

Although officials with MGM Mirage, Harrah’s Entertainment, Las Vegas Sands and Station Casinos have topped the list in previous years, Steve Wynn earns this year’s Number 1 spot. The Wynn Resorts CEO reported total compensation of us$ 8.4 million, including a salary of us$ 3 million.

On the In Business list for 2008 salaries, Wynn ranked Number 5 with total compensation of us$8.5 million. Wynn is among several local executives who received bonuses in 2009, the worst year on record for the gaming industry in Las Vegas. Executives qualify for incentive pay if their companies meet or exceed predetermined performance goals.

They can receive bonuses for reasons that have little relation to actual earnings, such as years of service or milestones such as acquisitions or resort openings.

Compensation packages include any gains in the value of retirement plans, earnings from the sale of stock or stock options and other executive perks such as high-end health insurance plans and allowances for use of company cars and airplanes.

Bonuses boosted the rankings for other Wynn executives, including the number 2 executive, Matt Maddox. Wynn’s CFO earned us$ 7.3 million last year, including a us$ 5.7 million bonus — the highest on the list — atop his us$ 779,988 salary. He got a raise, too. At number 4, Wynn Chief Operating Officer Marc Schorr earned us$ 6.5 million, including a bonus of us$ 2 million, a salary of us$ 1.8 million and us$ 1.5 million from the sale of Wynn shares.

MGM Mirage CEO Jim Murren ranks third, with us$ 6.7 million in compensation, including a us$ 2 million salary, us$ 3.5 million in incentive pay and a us $500,000 bonus.

Murren ranked number 4 in 2008 with total pay of us$ 9.9 million. In 2009, he was one of the few executives to receive a higher salary — us$ 2 million versus us$ 1.5 million in 2008 — thanks to his promotion to CEO after the sudden departure of Terry Lanni in 2008.

Harrah’s Entertainment CEO Gary Loveman is number 5 with total compensation of us$ 6 million, including a us$ 1.9 million salary and us$ 3 million in incentive pay. Loveman was number 1 in 2008 with total pay of us$ 92.3 million, but that included a gain of us$ 87.1 million on the exercise of options related to the deal in which the company was taken private.

Executive compensation packages are determined by committees composed of independent members of corporate boards. These committees typically base salaries and other subjective measures on what similar companies pay.

Like shareholders in many other American business sectors, some gaming investors question whether the industry’s top executives — given the billions in lost shareholder wealth — are worth the millions they get paid.

Those complaints are raised by some stockholders of MGM Mirage, Harrah’s Entertainment and Station Casinos, companies that took on massive debt when times were good and are paying the price now. Station sought bankruptcy protection, and MGM and Harrah’s, forced to divert much of their earnings to pay down those debts, are striking deals with lenders to avoid a similar fate.

MGM narrowly escaped bankruptcy last year as it scrambled to finance CityCenter, which placed a major financial burden on the company as business was plummeting in Las Vegas.
MGM executives still received incentive pay last year thanks to its us$ 980 million in earnings. Incentive pay was pegged to the company earning at least 70 % of its desired earnings target of us$ 1.4 billion. It earned 88 % of the target.

Wynn went another route, awarding no incentive pay, but doling out cash bonuses to executives “in recognition of the financial success” of the Hong Kong-based initial offering of public shares for its Macau casinos and “success in adjusting the company’s financial structure to resist the extremely difficult macroeconomic and credit market conditions in 2008 and 2009.”

Despite its plunging earnings in Las Vegas, Wynn Resorts is among the most financially stable of the gaming giants, in part because it did not take on huge debts during the boom years. According to an executive analysis conducted by pay expert Graef Crystal for Bloomberg News in May, Steve Wynn, the only casino executive to be included, is slightly underpaid.

The study used shareholder returns as the main barometer for appropriate pay. Crystal said that was the best measure because the returns can’t be manipulated by shifting performance targets and creative accounting techniques.

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