Things are tough all over.
Wynn Resorts’ billionaire Chairman and CEO Steve Wynn has been handed a 37.5% pay cut, according to a company filing.
The 72-year-old gaming boss has had his contract extended two years, through October 2022, but at a salary of US$2.5 million a year. He was getting $4 million.
Also, his compensation will include for the first time a performance-based equity component, according to a corporate statement cited by the Las Vegas Review-Journal. As part of his new deal, he also will have to pay to use the company jet for personal purposes, although this will be offset with a $250,000 credit per year, according to the filing.
Wynn spokesman Michael Weaver emphasized that Mr Wynn’s “contributions to the company’s longstanding, consistent achievement over the last decade have been, and continue to be, instrumental in creating significant stockholder value,” and in line with this, his new employment agreement “now places a greater proportion of his overall compensation attributable to components that drive stockholder value versus fixed base salary”.
The company launched a review of executive compensation last year, according to the Review-Journal report, and has begun to stress pay-for-performance over fixed salaries.
Wynn is worth $3.5 billion, according to Forbes.
In addition to its flagship Las Vegas resorts, Wynn and Encore, the company is heavily invested in Macau, which has boomed over the last decade to become a significant generator of Wynn’s cash flows. Through its Wynn Macau subsidiary, the company operates two casino hotels in the Chinese city and is spending US$4 billion to develop a third, slated to open in 2016.
However, the market fell off dramatically last year, mainly as a result of plummeting VIP play, and the stocks of its six Hong Kong-traded operators—Wynn Macau included—have taken a beating. Analysts attribute the current woes to a pervasive crackdown directed by the Chinese government on high-level corruption and illicit money flows, aggravated by tighter restrictions on frequent travel from mainland China and generally slower growth in the Chinese economy.
Wynn Macau (1128.HK) closed Wednesday at HK$20.05, near its 52-week low of $19.82. It had been as high as $38.80 over the period.
Parent Wynn Resorts (Nasdaq: WYNN) closed in New York on Wednesday up 86 cents to $142.89.
