MGM CEO gets $500,000 raise, performance incentives

By Liz Benston

Friday, April 10, 2009 | 7:23 p.m.

Under a new employment contract effective Dec. 1, MGM Mirage Chief Executive Jim Murren will receive a salary increase of $500,000 and will be eligible for additional performance-based cash awards of up to $4.25 million.

Murren's new base salary of $2 million reflects the fact that he took on additional responsibilities when he was appointed to lead the company, MGM Mirage spokesman Alan Feldman said.

Murren replaced Terry Lanni as chairman and CEO on Dec. 1 after Lanni said he was stepping down to spend more time with his family. Lanni's retirement coincided with doubts about the veracity of his resume.

MGM Mirage has not appointed a president and chief operating officer to replace Murren.

Lanni earned a base salary of $2 million at MGM Mirage, as well as several million dollars' worth of incentive payments.

The new agreement calls for Murren to receive a severance payment of $7 million if he is terminated or if the company changes hands.

Murren also receives 2 million stock options that expire in seven years under an amended 2005 incentive plan. The options, called stock appreciation rights, vest over a period of four years at strike prices of $8 and $17 per share, separately.

Like any other executive at MGM Mirage, Murren – who will not be receiving a bonus for 2008 – is eligible to receive a performance-based bonus for 2009. Whether he receives that bonus is up to the Compensation Committee of the company's board of directors. The committee's performance criteria are subject to change.

The new employment agreement expires April 7, 2013 and replaces a 2005 contract that would have expired Jan. 4, 2010.