Casino executives receive pay raises

Casino executives' salaries continue to rise, but so does the value of their companies' stock.

The industry's best chief executive salary and bonus compensation package jumped 31.6 percent in 1999 when Park Place Entertainment's Arthur Goldberg earned $5 million. The previous record holder was Mirage Resorts' Steve Wynn with $3.8 million in 1998.

Owners of gaming stock did even better. The Chicago Board Options Exchange index of key gaming stocks was up 49.8 percent, to 252.45 from 168.47.

Chief executives' pay is partly determined by the size of the executive's company, measured by revenue and the company's profitability, said Mae Lon Ding, president of Anaheim Hills, Calif.-based Personnel Systems Associates and an executive compensation expert.

By those measures, MGM Grand Chairman Terry Lanni, whose company was the most profitable and the fourth-largest in 1999, was underpaid. His salary and bonus totaled $1.9 million.

Lanni's new subordinate, Bobby Baldwin, earned $2.4 million as Steve Wynn's right-hand man. Baldwin, who was chief financial officer and treasurer of Mirage Resorts, will serve as chief executive of MGM Grand's Mirage subsidiary and will report directly to Lanni.

Baldwin also earned more than the chief executives of three other major casino companies: Phil Satre of Harrah's Entertainment, $2 million; William Boyd of Boyd Gaming Corp., $1.8 million; and Mike Ensign of Mandalay Resort Group, $1.8 million.

Gaming executives have produced profit and shareholder value and have earned their salaries and bonuses, said Bill Thompson of the University of Nevada, Las Vegas' Department of Public Administration.

"Their rewards are not out of line," he said. "Sports stars earn far more than gaming executives make, yet they work a lot harder than the athletes do."

Those salaries also are boosted by lucrative stock options that might persuade top executives to accept lower salaries in return for the potential of long-term wealth through stock.

Comparisons with star athletes aren't superficial, said Ding, who thinks the star culture is part of the American social fabric.

"The top executives tend to be the stars - and the CEO is the key player in the company's game. If the business plan doesn't work, other individuals' contributions won't matter," she explained.

Not everyone buys into the idea that corporate executives should be paid like athletes or movie stars.

"I personally feel like $2 million is adequate for any executive," said Evelyn Davis, editor of Highlights and Low Lights, a newsletter for corporate leaders.

"Executive salaries are driven by ego. If one of them gets a big salary increase, everyone else wants one too," she added.

Only four executives earned 1999 salaries and bonuses of more than $2 million, but eight earned at least $1.8 million.

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