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Despite stalled growth in China, Brazil and Russia, a wave of newly middle-class travelers from the BRICs and beyond will start visiting international destinations in the coming decades — dwarfing the numbers we’ve seen thus far.
The gaming companies don’t have the most beds, but they’ve managed to turn each one they have into a reliable cash register for their business.
Perhaps for Steve Wynn’s next Wynn Resorts’ commercial he’ll begin with his trademark, “Hello, I’m Steve Wynn,” and then add, “I made $19.6 million in total compensation in 2013 as chairman and CEO of Wynn Resorts.”
Skift examined the financial filings of publicly listed hotel companies and came up with a list of the Top 10 Hotel CEO Pay Packages of 2013 [see below], ranging from top-earner Steve Wynn’s $19.6 million to Hilton Worldwide CEO Christopher Nassetta’s $2.26 million at number 10.
Before you feel sorry for Nassetta’s base salary of a mere $850,000 and $2.26 million in total compensation in 2013 (both lowest among the top 10) as the chain’s president and CEO, consider that he signed a new employment agreement in February 2014 growing out of Hilton’s successful 2013 IPO, which raised $2.35 billion.
Among the changes in Nassetta’s contract, his 2014 base salary increases 41% to $1.2 million, and he was granted 158,311 options, 55,736 restricted stock units, and 167,208 performance shares. Although it’s premature to calculate Nassetta’s 2014 total compensation, rest assured that he’ll be able to pay his grocery bills.
As Wynn Resorts noted in a financial filing dealing with 2013 executive compensation, its “compensation committee is mindful that gaming companies have historically provided total compensation packages that may be higher than many of then non-gaming counterparts due to the unique blend of entrepreneurial and managerial skills required to be successful in gaming and certain regulatory and other extraordinary demands.”
And that trend held true among the Top 10 Hotel CEO Pay Packages in 2013 as the CEOs of gaming companies, including Steve Wynn of Wynn Resorts (No. 1, $19.6 million), Sheldon Adelson of Las Vegas Sands (No. 2, $14 million ) and James Murren of MGM Resorts (No. 4, $10.9 million) took three out of the four top slots, with Wyndham Worldwide chairman and CEO Stephen Holmes squeezing in at No. 3 with a total compensation package of $13.5 million.
It should be noted, however, that Starwood president and CEO Frits van Paasschen’s $10,913,694 total compensation package for 2013 placed him fifth among hotel CEOs, although he was in a virtual dead heat with James Murren, chairman and CEO of MGM Resorts, who earned $10,991,426 at No. 4 in the Top 10.
That’s a piddling difference of $77,732.
Starwood says van Paasschen’s total compensation has “moved in tandem with our annual total shareholder return over the past five years.”
Starwood’s total shareholder return in 2013 stood at 41%.
He’s Definitely Wynning
Steve Wynn achieved his status as 2013’s most highly compensated hotel CEO not just for his chairman and CEO duties, but also because he’s a marketing tool.
As Wynn Resorts stated: “Mr. Wynn’s aesthetic vision, direction and the public’s association of his name and likeness with our casino resorts and services are unique and integral components of our success and provided the context for determining Mr. Wynn’s compensation for 2013.”
There was one downer for Wynn in 2013, however. Wynn Resorts decided that starting in November 2013 he would have to pay $525,000 per year to lease a villa at Wynn Las Vegas as his personal residence. The abode had previously been provided to Wynn as part of his compensation package.
Wyndham CEO Helped Beat Performance Targets
Wyndham chairman and CEO Stephen Holmes took the No. 3 position, and was the top earner among the non-casino hotel company CEOs with a 2013 total compensation package of $13.5 million, and this included $5.25 million in stock awards, $1.75 million in option awards, and $4.27 million in non-equity incentive compensation.
Wyndham exceeded certain EBIT (earnings before interest and taxes) targets, which propelled Holmes’ pay. Wyndham characterized its 2013 results as “strong,” with net income increasing 8% to $432 million on $5 billion in revenue, a 10% jump.
Among other points of interest in the Top 10 Hotel CEO Pay Packages in 2013 was Marriott president and CEO Arne Sorenson’s $9.16 million compensation.
Investment research firm GMI Ratings gave Marriott’s board a grade of “F” in corporate governance because of the presence of insiders on the board, including J.W. Marriott Jr., John Marriott III and Sorenson, and some board members’ over-commitments to other boards, among other factors.
GMI also found fault with the fact that Marriott doesn’t disclose performance targets, doesn’t necessarily figure Sorenson’s base pay after conducting external reviews, and can give its CEO long-term incentive pay “for below-median performance,” Marriott says.
This year was not “below median,” though: In 2013, Marriott’s diluted earnings per share increased 16% to $2 while revenue jumped 8% to $12.78 billion.
Following are the highest compensation hotel CEOs among public companies in 2013:
Top 10 Hotel CEO Pay Packages of 2013
|Hotel Brand||CEO||Salary||Stocks, Options, Incentives, Bonus, Pension Change||All Other Compensation||Total|
|1. Wynn Resorts||Steve Wynn*||$4,000,000||$14,000,000||$1,601,381||$19,601,381|
|2. Las Vegas Sands||Sheldon Adelson**||$1,000,000||$9,426,241||$3,577,640||$14,003,881|
|3. Wyndham||Stephen Holmes*||$1,451,932||$11,268,679||$818,321||$13,538,932|
|4. MGM Resorts||James Murren*||$2,000,000||$8,427,683||$563,743||$10,991,426|
|5. Starwood Hotels||Frits van Paasschen||$1,250,000||$9,584,950||$78,744||$10,913,694|
|6. Marriott||Arne Sorenson||$1,200,000||$7,825,959||$132,661||$9,158,620|
|7. Hyatt Hotels||Mark S. Hoplamazian||$1,015,000||$5,805,458||$37,929||$6,858,387|
|8. InterContinental||Richard Solomons||$1,236,784||$413,944||$3,648,094||$5,298,822|
|9. Choice Hotels||Stephen Joyce||$928,846||$3,536,658||$201,881||$4,667,385|
|10. Hilton Worldwide||Christopher Nassetta||$850,000||1,290,420||$121,622||$2,262,042|
Source: Securities and Exchange Commission filings
* Chairman and CEO
** Sheldon Adelson is Las Vegas Sands’ chairman, CEO and treasurer
Note: All of the other CEOs listed are president and CEO of their companies