MGM Mirage rewards execs

Company awards five senior executives $2.6 million in annual pay raises

By JEFF SIMPSON
GAMING WIRE

MGM Mirage locked up its top brass with new four-year contracts that give its five senior executives a total of $2.6 million in annual pay raises, the company announced in a Friday filing with the Securities and Exchange Commission.

The MGM Mirage Board of Directors also awarded the quintet a total of 400,000 shares of company stock, valued at $14.3 million at Friday's market close.

"The whole objective of these new contracts is stability," MGM Mirage spokesman Alan Feldman said. "There's a lot on our plate, with the Borgata in Atlantic City (jointly owned with Boyd Gaming Corp.), our own Atlantic City development, our new Detroit property and a Bellagio expansion. We want to make sure we keep the team in place."

Chairman and Chief Executive Officer Terry Lanni was the biggest beneficiary of the board's largesse, doubling his annual salary to $2 million. His grant of 150,000 shares of company stock, fully vested after four years, would be worth another $5.4 million at Friday's closing price.

"The merger two years ago between MGM Grand Inc. and Mirage Resorts has been remarkably successful," noted James Aljian, an outside director and chairman of the board's compensation committee, in a Friday statement. "In consideration of the fact that there will be continued demand for top talent in the industry, the board believed it was a strategic imperative to keep this team with MGM Mirage into the foreseeable future."

McDonald Investments casino industry analyst Dennis Forst said MGM Mirage's brass comprises one of the top executive teams in the business, and that the company's board would be right to worry that competitors might try to hire MGM Mirage talent.

"The casino industry is a competitive environment," Forst said. "Other companies would definitely want to lure these guys."

The company's quality properties, including Bellagio, The Mirage and MGM Grand, its high Wall Street valuation and the success of the stock are all evidence that MGM Mirage executives are among the tops in their field, he added.

Lanni's pay raise vaulted his salary past those of chief executives at the country's other top casino operating companies. Harrah's Entertainment Chairman and CEO Phil Satre earned $1.2 million last year, while Mandalay Resort Group Chairman and CEO Mike Ensign stands to collect $983,333 this year and Park Place CEO Tom Gallagher's contract calls for him to earn $975,000.

All four chief executives are also eligible to receive, and likely to get, additional compensation in the form of annual bonuses.

The top bosses at MGM Mirage's two operating units, MGM Grand Resorts and Mirage Resorts, also received raises elevating their salaries above the top executives at competing companies.

Mirage Resorts CEO Bobby Baldwin inked a deal raising his salary by 50 percent to $1.5 million. MGM Grand CEO John Redmond collected a 62.5 percent increase to $1.3 million.

MGM Mirage President and Chief Financial Officer Jim Murren's salary will jump 50 percent to $1.2 million under his new deal. MGM Mirage Executive Vice President, Secretary and General Counsel Gary Jacobs received a 40 percent boost to $700,000.

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