Wynn Resorts Ltd, parent of Macau casino operator Wynn Macau Ltd, has extended the contract of company founder and chairman Steve Wynn (pictured) by two years, but reduced his annual basic salary by 38 percent. The parent firm said so in a filing to Nasdaq in New York on Tuesday.
According to the filing, Mr Wynn’s annual base pay will fall from US$4 million to US$2.5 million. But his contract with Wynn Resorts is extended for two years through to October 24, 2022.
In a statement on Wednesday, Wynn Resorts explained that the compensation of the company’s chairman and CEO has been adjusted to include a performance-based equity component as part of his compensation.
“This marks the first time Mr Wynn has received equity as part of his compensation and now places a greater proportion of his overall compensation attributable to components that drive stockholder value versus fixed base salary,” the company said.
The casino operator explained that the changes to its executive compensation practices aim to reduce fixed components of overall compensation and increase potential for incentive compensation “based on achievement of established goals and including equity as a significant part of incentive compensation”.
Wynn Macau’s stock price fell by 38 percent in 2014 according to data from Reuters. Macau’s other five casino operators also saw stock values fall as VIP revenues declined sharply on the back of an anti corruption campaign in China and a slowing Chinese economy.
A Wynn Resorts proxy filing to shareholders on March 31, 2014, said Mr Wynn’s “talent, image and likeness are key to our continued success.”
The March 31 document added the casino firm’s chairman had – via his leadership – generated “approximately US$5.4 billion, or US$48.75 per share, through the payment of dividends,” to stockholders between the time of Wynn Resorts’ initial public offering in 2002 and December 31, 2013.
“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,” the firm said in Wednesday’s statement.
Under the new compensation arrangement announced on Tuesday, Mr Wynn must continue to reimburse the company for “certain expenses for any of his personal use of company aircraft”. But he will be given an allowance of US$250,000 per year to “offset” his personal flight costs added the document. The new deal is effective from January 1.
In 2013 Mr Wynn received US$19.6 million – nearly five times his then US$4 billion base pay – in the form of executive compensation. The additional compensation comprised a bonus of US$4 million, US$10 million in “non-equity incentive plan compensation” and “other compensation” of just over US$1.6 million, said the March 2014 proxy filing.
Mr Wynn’s discretionary compensation for 2013 included US$4 million awarded by the compensation committee of Wynn Macau “in consideration of finalisation of plans for Wynn Palace in Cotai and his contribution to the extraordinary performance of Wynn Macau for the year ended December 31, 2013,” stated the proxy filing.
(Update at 1.46pm)
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