Thursday, Dec. 9, 1999 | 11:30 a.m.
MGM Grand Inc. shuffled its top management team Wednesday, elevating three key executives and announcing that Terry Lanni will remain chairman of the company while Alex Yemenidjian will resign as president.
The casino company said Chief Operating Officer Daniel Wade and John Redmond, who has run MGM Grand's Primadonna properties since their acquisition earlier this year, were named co-chief executive officers.
Chief Financial Officer Jim Murren, who spent 14 years on Wall Street before joining MGM Grand in January 1998, has been named to fill Yemenidjian's post as president.
Yemenidjian, who was elected chairman and chief executive officer of Metro-Goldwyn-Mayer Inc. in April, is leaving his post as president of the casino company to devote more time to the movie studios. But he will remain a director and member of the executive committee of MGM Grand.
Lanni, who announced in October that he was resigning as MGM Grand's chief executive, will stay on as chairman and executive committee member.
Securities analysts applauded the moves, which take effect Dec. 30.
"Jim has earned this," said Bear Stearns & Co. Senior Managing Director Jason Ader of Murren's promotion to president. "He's a pleasure to deal with and has been an important part of the success of MGM as a stock. Part of why MGM Grand trades at the highest valuation of any gaming company is because of Wall Street's confidence in Jim and the numbers.
"Danny Wade and John Redmon have helped create and improve the product over the past several years, while Terry Lanni is among the most respected people in the gaming industry," Ader said.
"This all provides additional stability. Terry can spend more time acting as a strategic planner and turn the day-to-day management over to the new team."
Ader said Yemenidjian's departure as president will help quell concerns among some holders of Metro-Goldwyn-Mayer stock.
"The MGM studio is a very visible public company. It creates an issue when some shareholders see a person working as an executive of two companies," Ader said.
"Though Alex is capable of doing the work of 10 people, some studio holders were concerned. Now that conflict is gone. The casino company is run by an executive committee, and Alex is still a part of that. But by title he'll be associated with only one entity, and that should ease investor concerns."
Dave Ehlers, chairman of Las Vegas Investment Advisors Inc., said the fact Lanni will remain chairman of the casino company goes a long way toward ensuring MGM's stellar performance since he assumed the post in 1995 will continue.
"If anything bad had happened on Lanni's watch, you'd have blamed him," Ehlers said. "A lot of good things have happened, so you've got to give him credit. Stockholders have made a lot of money with him as chairman.
"It's apparent Lanni knows how to cook the soup, so the board probably figured this: We understand Terry wants to go back to California and spend more time with his family.
"But let's keep him involved as chairman and on the executive committee and let him spell out his vision for the future, with the new management team reporting directly to him," Ehlers said.
"I think this is a very clever way of ensuring that the guy who wrote the music is going to continue to lead the orchestra."
Since the earlier announcements of the Lanni and Yemenidjian moves, there has been widespread speculation about who would assume what posts in the casino company controlled by billionaire Kirk Kerkorian, who also owns a majority stake in the MGM studios.
"We've been working on this internally for several months, making sure we put people where they can excel and do what's best for the company," Murren said.
"We have a very team-oriented management approach. The reality is the executive committee governs the direction of the company. John, Danny and I will report directly to the executive committee," he said.
"Alex is heading a multi-billion entertainment company and it's not an easy job. But he still remains on our executive committee and board and will remain very much involved."
In a statement, Lanni said the board's "decision to promote from within is a testament to the highest-caliber management team in the industry."
"MGM Grand's considerable management and financial resources combined with exciting new project opportunities should result in significant growth in the coming years."
"Terry and I made it a priority to attract and cultivate the best talent in our industry to accomplish our goal of becoming the premier gaming company," Yemenidjian said.
Wade, 47, has been with MGM Grand since 1995. He will be responsible for overseeing the operations of both the MGM Grand and New York-New York hotel-casinos in Las Vegas and serve on the board and executive committee.
Redmond, 41, will oversee the operations of MGM Grand Detroit and the Primadonna properties in Nevada, as well as serve on the board and executive committee.
Murren, 38, will oversee the company's development and international subsidiaries and continue as chief financial officer, a director and executive committee member.
In addition to owning the MGM Grand and three Primadonna resorts, the company operates the first temporary casino in Detroit, where it is planning to build a permanent facility. It also operates casinos in Australian and three South African cities and plans to build one in Atlantic City.
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