Departing MGM Resorts International Chairman and CEO Jim Murren will collect $31.9 million in salary, bonuses, stock, severance and monthly consulting fees through the end of 2021, according to a securities filing Friday.
Murren, 58, who announced Wednesday he would step down from his positions with the company before his contract expired at the end of next year, agreed to a CEO transition agreement a day earlier, according to the form 8K filed with the Securities Exchange Commission.
The filing suggests MGM Resorts will have a new CEO in place by the end of 2020.
According to the filing, Murren, who will continue in his positions with MGM Resorts until the casino giant’s board appoints a replacement, will become a “senior advisor” to the company, after Dec. 31, 2020.
Murren, who has been chairman and CEO since 2008, will receive:
- His current base salary of $2 million
- A fixed bonus of $4 million in cash at the end of 2020
- An equity award of restricted stock valued at $7 million
- A lump sum severance payment of $12 million, “which represents two times the sum of his annual base salary and target annual bonus” under his contract, “plus a lump sum cash payment for the cost of two years of certain insurance coverages”
- A 12-month consulting fee of $575,000 per month – $6.9 million – for “consulting services as may be reasonably requested by the board.”
According to MGM Resorts’ 2019 proxy statement Murren – in salary, bonus and other compensation – earned $12.8 million in 2018, $14.6 million in 2017 and $16.6 million in 2016.
Murren announced his departure prior to the release of MGM Resorts’ fourth quarter earnings.
On a conference call with analysts, Murren said the dynamics of company had changed greatly and that he would assist in the transition to a new CEO.
“The company has never been in a better position,” Murren said. “When I thought (it) through, how I could best serve MGM going forward, I thought it was pretty clear that a (new) leader should help lead a company into the next decade or two.”
A committee of independent MGM board members and an executive search agency will be tasked with selecting Murren’s replacement.
“Jim has led the company through growth, transforming it into a global entertainment company with a worldwide footprint and creating value for MGM Resorts shareholders,” Roland Hernandez, the MGM board’s lead independent director, said in a statement.
Murren joined MGM in 1998 as chief financial officer and president. He became chief operating officer in 2007. He moved into his current roles following the retirement of the late Terri Lanni.
At the time, the $9 billion CityCenter development on the Las Vegas Strip was a year from opening, its finances ravaged by the recession that was gripping the country.
However, Murren and his team – with advice from the late billionaire Kirk Kerkorian, MGM’s largest shareholder at the time, and Senate Majority Leader Harry Reid of Nevada, who asked banks and financial institutions to loan MGM the money needed to finish CityCenter – got the project completed and opened in December 2009.
Murren’s announcement followed a year of turmoil for MGM Resorts. Through the MGM 2020 company-wide cost reduction effort, more than 1,000 employees were laid off while several long-time executives took early retirement buyouts.
In October, MGM settled litigation with victims of the October 1, 2017 shooting in Las Vegas, agreeing to pay between $735 million and $800 million, of which up to $751 million will be funded by the company’s insurers. A gunman perched in a Mandalay Bay hotel room fired down at the Route 91 Harvest Music Festival on concert grounds owned by MGM, killing 58 people and wounding hundreds.
#HotClicksandPicks – THIS WEEK: SEC filing- Murren to receive almost $32 million to depart MGM Resorts. –@howardstutz, CDC Gaming. https://t.co/DF64GCfbyv #CDCgaming
— CDC Gaming (@CDCNewswire) February 15, 2020
Murren is credited with spearheading MGM’s growth through construction and acquisition. The company built the $1.2 billion MGM National Harbor in Maryland in 2016 and the $960 million MGM Springfield in Massachusetts in 2018 and acquired casinos in Ohio and New York last year. He also solidified the company’s leadership on the Las Vegas Strip and was “deeply involved” in bringing professional sports teams to the city, as well as building T-Mobile Arena.
“This was not a decision that I made lightly,” Murren said on Wednesday’s conference call. “However, I know the company is well-positioned. Our balance sheet is strong. We have an efficient operating model and a powerful strategic plan.”
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
