This year’s analysis of CEO compensation was a story about the large and small players in gaming. Our study included 44 CEOs from the United States, Europe and Asia. All run public companies that derive a significant portion of their revenues from gaming. The market capitalization of the group ranged from Las Vegas Sands at $45 billion to Littlefield at $4 million, a wide range to say the least.
Although size is an important factor in determining compensation, our value index allows for reasonable comparisons between the industry’s smaller and larger operators and suppliers. In addition to company size, our pay-for-performance index takes into account EBIDTA growth and stock appreciation over a three-year period to determine a CEO’s performance relative to his or her pay (see Gaming Industry CEO Survey chart).
Based on our pay-for-performance index, Joe D’Amato at Empire Gaming was the industry’s most underpaid boss or top performing CEO, depending on your point of view. Rounding out our list of the top ten most underpaid/top performing bosses are Danny Gladstone at Ainsworth Game Technology and Robert Saucier at Galaxy Gaming, all small company players. Jim Murren of MGM International was the only large casino operator to make that list; a sign that he probably deserves a pay raise.
That said most of the big casino companies paid their CEOs reasonably relative to their performance. With a value index of approximately 100, Gary Loveman at Caesars Entertainment, Steve Wynn at Wynn Resorts and Sheldon Adelson at Las Vegas Sands all deserved their hefty paychecks. For all those critics who think all CEOs are overpaid, we demonstrate that performance should dictate pay and these guys deserved every penny.
The top salaries in the gaming industry ranged from Steve Wynn’s salary of $4 million to $1 million for Richard Haddrill at Bally Technologies. Rounding out the group were most of the big casino CEOs, including Jim Murren, Gary Loveman, Peter Carlino at Penn National and Sheldon Adelson.
Most of the same players had the largest short-term incentives (bonuses), with Steve Wynn pulling in a cool $12 million. The other top ten bonuses were all over $1 million, with Murren at $3.2 million and Adelson at $2.9 million.
The long-term incentive category was very interesting this year, as founding CEOs such as Steve Wynn, Norbert Teufelberger of bwin.party, Lyle Berman of Lakes Entertainment and David Baazov at Amaya Gaming received no long-term incentive this year. Many would say that as significant shareholders they do not need more stock to motivate their performance.
The richest CEO in the gaming space is Mickey Arison at Carnival owning company stock worth more than $6 billion. Sheldon Adelson came in second this year at $3.6 billion, although his wife and trust control over 50 percent of the company worth in excess of $20 billion. The other billionaire is Steve Wynn at just over $1 billion.
It appears that the industry is nursing back to health and so are the paychecks of the industry’s CEOs. Globalization has also impacted the landscape of gaming with Asia Entertainment, Rank, Ladbrokes, Entertainment Gaming Asia and Melco Crown becoming part of our study. We suspect that will continue as gaming companies access the public markets around the world for expansion capital.