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Rod Smith

Gaming Execs Make Forbes Compensation List

4 May 2004

Top executives at four Nevada gaming companies -- Caesars Entertainment, Harrah's Entertainment, International Game Technology and MGM Mirage -- made this year's Forbes list of compensation at the top 500 U.S. companies.

Although the company bosses may not enjoy the kind of publicity making the Forbes list brings, Brian Gordon, spokesman for Applied Analysis, a Las Vegas-based financial consulting firm, said the local executives' compensation packages were on a par with those at other industries and at other companies of similar size. Each of the three gaming operators are projected to generate more than $4 billion in revenues this year, and slot making giant IGT is in line to generate more than $2.5 billion in revenues. In addition, each of the companies has a compensation committee made up of board members that approves all pay levels, he said. In its listing in this month's Forbes, the magazine defined total compensation to include salary and bonuses; "other" compensation including vested restricted stock grants; and "stock gains," the value realized from exercising stock options during the just-concluded fiscal year. "We're looking at four companies in a very unique industry with its own set of challenges. It's heavily regulated, always has to innovate and they all have to think outside the box to attract new customers," Gordon said about the gaming executives listed by Forbes. Gordon also said that with the implementation of the Sarbanes-Oxley Act to reform corporate governance, executives now can be held personally liable for corporate governance and accounting practices, which "requires some level of compensation." Terry Lanni, chairman of MGM Mirage, was the highest paid local executive on the list with $11.9 million in total compensation and holdings in the company of $7.5 million. Harrah's Entertainment President Gary Loveman made $3.1 million, Caesars Entertainment President Wally Barr made $2.5 million last year and IGT Chief Executive Officer T.J. Matthews made $2.1 million. Altogether, the America's 500 biggest companies paid $3.3 billion in executive compensation in fiscal 2003, up an average 8 percent from $3.1 billion in fiscal 2002. However, total compensation for the top executives at the four gaming companies declined 18 percent from $23.8 million in 2002. Each of the four executives also has a substantial financial stake in his company, with Loveman owning $8.1 million worth of stock, Lanni owning $7.5 million, Matthews owning $4.4 million and Barr owning $400,000. All four corporate leaders and their public relations staffs declined to comment Monday. Deutsche Bank analyst Marc Falcone said the question of pay is tough from a public relations perspective, but he noted that the four executives head the top companies in the gaming industry and are fairly compensated. "Their pay reflects the job they've done to increase shareholder value," he said. Forbes also handed out grades for the companies where the chief executive had been in office six years or longer, comparing long-term stock performance with average six-year compensation, which left all four Nevada companies and their executives ungraded.

Gaming Execs Make Forbes Compensation List is republished from