There is no denying that a $32 million salary is substantial; but what some may question is whether a chief executive officer (CEO) is actually worth such an amount, especially when others in the company don’t make anywhere near that number. In fact, the average CEO in the S&P 500 makes 373 times the average worker.

Personally, we don’t really care about the size of someone’s paycheck as long as they truly earned it. Which is why, using a proprietary pay-for-performance model, we have evaluated the performance of 36 CEOs in the gaming industry. The goal is to determine whether a CEO actually deserves his or her pay relative to their industry peers.

We created the AETHOS Pay-for-Performance Model to calculate what a CEO should be paid comparative to operating performance, analyzing key financial metrics such as company size, stock appreciation, EBITDA growth, and total direct compensation within a defined peer group. The market capitalization of the peer group for this article ranged from a massive $41 billion for Las Vegas Sands to a much smaller $11 million for Wells-Gardner Electronics. Comparing CEOs from two vastly different companies may seem puzzling, but that is precisely what the model is intended to do. And what we found is that Las Vegas Sands’ Sheldon Adelson earned his $12 million paycheck whereas Anthony Spier at Wells-Gardner could have earned $500,000 and they both would have an AETHOS Value Index of 100.

We find that value creation should be the most significant factor in sizing up a CEO’s paycheck. For public companies, that corresponds to shareholder returns. That is why CEOs like Adelson and Stephen Wynn at Wynn Resorts can demand multi-million dollar paychecks and be worth every penny: people would much rather own their stock. 


It comes as no surprise that the highest paid CEOs in the industry work for the largest companies. Caesars Entertainment topped the list, paying Gary Loveman a total package of $32 million. Loveman stepped down as CEO this year, and interestingly, $26 million of his package came in the form of long-term incentives. Stephen Wynn’s $25 million paycheck is the second largest this year. Four additional gaming CEOs made north of $10 million in 2014: Sheldon Adelson at Las Vegas Sands ($12 million), Ram Chary at Global Cash Access ($11.7 million), Lawrence Ho at Melco Crown Entertainment ($10.6 million), and James Murren with MGM Resorts ($10.2 million). In total, 23 of the 36 CEOs made more than $1 million in total compensation. The average CEO paycheck in 2014 was $4.7 million, rising $800,000, or 21 percent, from the previous year’s $3.9 million average.

Although their pay packages were significant, these top-earning CEOs appeared to deserve it. All 10 had an AETHOS Value Index (AVI) near 100, indicating that their pay is on par when compared with their industry peers.

Topping this year’s list of pay-for-performance CEOs are Ian Burke of Rank Group and David Baazov of Amaya Gaming. Burke and Baazov both had an AVI of 233, signifying that each should have earned more than double their 2014 compensation package. Norbert Teufelberger of Digital Entertainment followed closely behind, with an AVI of 193. Rounding out the top five pay-for-performance CEO spots are Robert Saucier of Galaxy Gaming and Anthony Spier of Wells-Gardner Electronics.

Ten CEOs in the gaming industry received a base salary of $1 million or more. Stephen Wynn topped the list this year with $4 million, while Melco Crown Entertainment and MGM Resorts gave their CEOs $2.8 million and $2 million in salary respectively. Seven additional CEOs made between $1 million and $2 million.. The average base salary for 2014 was $841,000, raising only $25,000 from last year’s average.


To no surprise, many of these top-earning CEOs also received the largest bonuses in 2014, with Wynn taking home an additional $10 million. The next largest was Murren, with MGM awarding him $4.1 million, followed by Carnival’s Arnold Donald at $3.9 million. Galaxy Entertainment Group’s Dr. Lui Che Woo and Las Vegas Sands’s Sheldon Adelson round out the top five, both with a bonus of $3.7 million. The average CEO bonus in 2014 was $1.1 million, a $150,000 decrease from last year’s $1.25 million average bonus. Though their bonuses were not as large, 10 of the CEOs on our list received a bonus of $1 million or more, while 15 received no bonus at all.

In addition to their annual bonus, long-term incentives were a significant portion of overall CEO pay. Gary Loveman topped the list with his $26 million grant of shares and options. Four other CEOs received a grant of over $5 million: Chary ($10.9 million), Wynn ($10 million), Tim Wilmott of Penn National ($6.5 million), and Anthony Sanfilippo of Pinnacle Entertainment ($5.9 million). An additional nine gaming CEOs were given grants valued between $1 million to $5 million. The average LTIP value in 2014 was $2.5 million, a $1.1 million increase from last year’s $1.4 million average.

When taking into consideration the value of common shares owned, the richest CEO in the gaming industry is now Dr. Lui Che Woo at Galaxy Entertainment Group with an ownership interest worth over $15 billion. Adelson follows with an ownership interest in Las Vegas Sands valued at $4.6 billion. An additional two CEOs had ownership in their company worth more than $1 billion: Teufelberger of Digital Entertainment ($2.7 billion) and Wynn of Wynn Resorts ($1.5 billion).

We are interested to see how gaming companies respond to the Dodd-Frank Wall Street Reform and Consumer Protection Act rule that mandates companies report the ratio of CEO pay to their median employee. With the size of some of these paychecks, the ratio may be even higher than the S&P 500 average. Will it be a wakeup call or business as usual for the gaming industry?