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Best of Howard Stutz

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Howard Stutz
 

Spokesman: Wynn's pay will now include 'performance-based equity'

21 January 2015

LAS VEGAS -- Steve Wynn's 37.5 percent pay cut in base salary was described by Wynn Resorts, Limited as an adjustment that will include a performance-based equity component as part of his compensation.

In a filing with the Securities and Exchange Commission Tuesday, Wynn Resorts 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 e-mailed statement, Wynn 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 March 2014 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 longstanding, 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, although 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 the market's 35 large and small casinos saw gaming revenue fall 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 single-month 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 ultra-exclusive 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.