Steve Wynn’s 37.5 percent pay cut in base salary was described by Wynn Resorts Ltd. as an adjustment that will include a performance-based equity component as part of his compensation.
In a filing Tuesday with the Securities and Exchange Commission, Wynn Resorts Ltd. said it was slashing the CEO’s salary to $2.5 million per year from $4 million. Wynn, 72, who is also chairman of the casino company, had his employment agreement extended two years, expiring in October 2022.
In an emailed statement, Wynn Resorts spokesman Michael Weaver said the change marked the first time the CEO would receive equity as part of his compensation.
The new employment agreement “now places an greater proportion of his overall compensation attributable to components that drive stockholder value versus fixed base salary,” Weaver said.
Wynn Resorts, which operates casinos on the Strip and Macau, said in a March SEC filing that it would emphasize pay-for-performance in its executive compensation by reducing fixed components and increasing incentive potential.
“Mr. Wynn’s contributions to the company’s long-standing, consistent achievement over the last decade have been, and continue to be, instrumental in creating significant stockholder value,” Weaver said.
Wynn is worth $3.5 billion, according to Forbes magazine.
He will also now have to pay to use the company jet for personal purposes, though the filing outlined a $250,000 credit per year that he will receive to offset the reimbursement charges.
Meanwhile, Nomura Securities analyst Harry Curtis downgraded the stock value of Wynn Resorts and Las Vegas Sands Corp. because of declining prospects in Macau, where gaming revenue for the market’s 35 large and small casinos fell 2.6 percent in 2014, the region’s first-ever annual decline.
Macau has experienced seven straight monthly gaming revenue declines, culminating with December’s 30.4 percent dip, the market’s largest-ever monthly drop.
Wynn has two casinos in Macau and is building the $4 billion Wynn Palace on the Cotai Strip.
Macau’s casino industry has suffered since June. A crackdown on corruption by the Chinese government has focused on junket operators who bring high-end baccarat gamblers to the casino’s ultraexclusive private gambling rooms. Several operators have been linked to Chinese organized crime triads.
The crackdown has scared away high-end business, which was largely responsible for Macau’s record $45.2 billion gaming revenue total in 2013.
“With Beijing’s insistence on diversifying Macau’s revenues from gaming, we assume 40 percent to 50 percent lower table allocations for the new resorts,” Curtis said.
Wynn Resorts shares gained 86 cents, or 0.61 percent, to close at $142.89 on Wednesday on Nasdaq.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Find him on Twitter: @howardstutz