MGM Mirage employees to miss bonus

MGM Mirage told its workers Monday that it was eliminating this year's cash bonus program, which is based on achieving a certain level of profitability.

"It is unlikely we are going to meet those goals this year," MGM Mirage spokesman Gordon Absher said.

The company's cash bonuses differed for all employees and the company did not say what the triggering points were for each level. Absher said the casino operator wouldn't say how much it was saving by eliminating the bonus program for 2008.

Last week, MGM Mirage said it was leaving the Nevada Resort Association as a cost-cutting move.

"We feel it is only fair to inform employees of this situation as early as possible, rather than wait until the end of the year and the point when they would normally receive a regular cash bonus," Absher said. "This is not a move to husband cash. It is the result of cash bonus program triggers not being met due to business performance levels."

MGM Mirage has been hit by declining revenues and declining net income in 2008. The company's stock price has fallen from a 52-week high of $95.66 on Oct. 29 to Monday's close of $13.83. It fell $1.17, or 7.8 percent, Monday on the New York Stock Exchange.

Absher said bonuses will be eliminated for all employees, from the top levels of the corporate structure on down.

According to documents filed with the Securities and Exchange Commission, only three of the company's top seven compensated executives received cash bonuses in 2007. Chief Financial Officer Dan D'Arrigo earned a bonus of $390,000, general counsel Gary Jacobs was paid a bonus of $350,000 and Chief Administrative Officer Aldo Manzini earned a bonus of $940,000.

Executive compensation includes other forms of payment, including stock awards and other incentive payments.

MGM Mirage Chairman and Chief Executive Officer Terry Lanni earned $12.7 million in total compensation in 2007, which included $2 million salary. He was not paid a bonus, but collected $10.7 million in stock appreciation rights award, nonequity incentive compensation and other compensation.

Absher said nonequity incentive compensation is tied to profitability performance and was going to be eliminated for 2008.

"That category was unlikely to meet the criteria," Absher said.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.