Thursday, Nov. 13, 2008 | 10:03 p.m.
The chairman and chief executive of casino operator MGM Mirage Inc. announced his retirement Thursday and quickly faced questions about whether he had inflated his academic record.
Terrence Lanni, 65, announced his retirement effective at the end of the month, saying it was time to pass responsibility to a younger generation after 13 years at the helm of the casino giant.
Lanni guided the company from a one-casino operation to its current status as the largest gambling operator on the Las Vegas Strip and the world's second-largest casino company. He will remain a member of the board of directors.
MGM Mirage spokesman Alan Feldman said questions about Lanni's academic credentials had "no bearing whatsoever" on his decision to retire.
News of the retirement came hours before the Wall Street Journal reported on discrepancies between Lanni's corporate biography and records at the University of Southern California, where he earned his bachelor's degree.
Although a biography on the company's Web site says Lanni holds a master's degree in finance from the school, a university official said Lanni never graduated.
"He was enrolled in graduate level courses off and on from fall 1965 through fall 1967, but no degree was conferred," spokesman James Grant told The Associated Press.
Feldman said the company first learned of the issue Thursday morning.
Lanni believes he received an honorary degree at an "Alumni of the Year" ceremony in 1992, Feldman said.
But Grant said school records show no honorary master's degrees in business have been awarded at the school since 1933.
Biographies published by Lanni's employers have included a master's degree long before 1992. A 1982 press release announcing Lanni's appointment to the board of directors of Caesars World said Lanni received the degree in 1967.
The company says Lanni first considered retirement last year.
He told employees in a letter announcing his decision that he wanted to devote more time to philanthropic work through his family foundation with his wife, Debbie. He said he also wanted to become part of the company's diversity committee.
"This is not health related ... I am not running for public office anywhere; I am not taking over any other company, gaming or otherwise, and no, I'm not going to be on next season's 'Dancing With the Stars,'" Lanni said in his letter. "I simply believe that change is inevitable and this is the right time for me to do this."
Lanni said he was recommending Jim Murren, the company's chief operating officer, as his replacement.
A spokesman for MGM Mirage said the board had not set a date to make a decision.
If appointed, Murren would take over at a time when the company is navigating rough economic conditions.
In Las Vegas, visitor volume is down 2.5 percent for the first nine months of 2008. Gambling revenue on the Strip is down 6.6 percent through September, according to the Las Vegas Convention and Visitors Authority.
MGM Mirage's net income for the third quarter fell to $61.3 million, or 22 cents per share, compared with $183.9 million, or 62 cents per share, a year ago.
It hopes to save roughly $500 million a year companywide beginning in 2009 with various initiatives, including consolidating certain functions and other efficiencies, MGM Mirage officials said. The company also hopes to trim roughly $400 million from its CityCenter complex under construction in Las Vegas.
MGM Mirage owns 10 hotel-casinos on the Las Vegas Strip, including Bellagio, Mandalay Bay and The Mirage. In all, the company owns and operates 17 properties in Nevada, New Jersey, Illinois and Macau. It has 50 percent partnerships in four other properties.
The company is developing CityCenter, a $9.2 billion casino complex on the Strip that is the most expensive private commercial development in U.S. history. It is expected to open in 2009 with about 4,000 rooms.
Lanni joined MGM Grand Inc. in June 1995 after serving as president and chief operating officer at Caesars World Inc. for more than 14 years. The company started with one property, the MGM Grand hotel-casino in Las Vegas, and oversaw acquisitions of Mirage Resorts in 2000 and Mandalay Resort Group in 2005.
Lanni received $9.6 million in compensation in 2007, which consisted of $2 million salary, $6.4 million in non-equity incentive plan compensation and $1.2 million in other compensation, mostly in retirement benefits and personal use of company aircraft, according to a filing with the Securities and Exchange Commission.
In an interview conducted before the degree dispute was made public, Lanni told The Associated Press that he called the company's majority shareholder, billionaire Kirk Kerkorian, Wednesday night to inform him of his decision.
"I told him that I've been thinking about my family requirements and how long I've been in the business _ 32 years and 13 1/2 years here _ that I thought it was time for a younger generation, very frankly, to take on the responsibilities," Lanni told the AP. "I think literally with the challenges in the world today it's probably better served by younger people."
Kerkorian said in a statement that he is happy the 65-year-old Lanni will remain a member of the company's board because of his experience and institutional knowledge.
"The company will always be indebted to Terry for his many years of leadership and wisdom," Kerkorian said.
MGM Mirage shares fell 11 cents, or 1 percent, in late trading Thursday after ending the day up 77 cents, or 7.7 percent, at $10.77.
On the Net:
MGM Mirage Inc.: http://www.mgmmirage.com