Wynn Resorts CEO Steve Wynn repeated as the most highly compensated hotel CEO in 2014 while his casino-resort peers at Las Vegas Sands and MGM Resorts fell in the rankings compared with 2013.
Skift examined the financial filings of publicly listed hotel companies and came up with a list of the top 10 hospitality CEO pay packages of 2014 [see below], ranging from top-earner Wynn Resorts CEO Steve Wynn’s $25.3 million to Choice Hotel’s CEO Stephen Joyce’s $5.3 million at number 10.
Most hotel CEOs saw bigger pay packages in 2014 with the exception of MGM Resorts CEO James Murren’s small decrease of $800,000. Wynn’s total compensation package increased a whopping 29.2% to $25.3 million.
There’s been some shake-up in the list of most highly compensated CEOs since Skift first compiled the list last year. Wynn was still the overall top-earning hospitality CEO in 2014 but the CEOs of Starwood, Marriott and Wyndham all earned more than the Las Vegas Sands and MGM Resorts’ CEOs who were third and fourth, respectively in 2013. The CEOs of Marriott and Wyndham each collected more than $14 million in total compensation.
Marriott CEO Arne Sorenson knocked Wyndham CEO Stephen Holmes out of the top earning hotel CEO spot last year as the Marriott board awarded Sorenson additional equity for his “performance since becoming CEO.” That award is conditionally linked to maintaining strong annual room growth performance and the board also approved Sorenson’s cash incentive award at 150% of his annual salary.
With Marriott’s accomplishments this year such as launching a new content studio and continuing to coddle the mergers and acquisitions the brand’s carried out in recent years, there’s no doubt the Marriott board is pleased with Sorenson’s performance and wants to give him a good enough reason to stick around.
The Starwood Situation
Even though Starwood CEO Frits van Paasschen resigned earlier this year to much surprise he definitely didn’t leave 2014 empty-handed with his $12 million total compensation package.
van Paasschen didn’t receive his 2014 bonus due to his departure, which reportedly resulted from arguments with the Starwood board and his failure to grow franchise and managed properties.
The bonus could have been $1,875,000 and van Paasschen was also entitled to severance benefits from his resignation in the form of 1) certain accrued benefits 2) two times the sum of his base salary and target annual incentive and 3) a prorated annual incentive for the year of termination. A Starwood SEC filing reveals van Paasschen received about $1.2 million more in incentive and other compensation last year compared to 2013 likely due to his severance.
van Paasschen remains with the company in a consulting role until May 31 to help with the transition and since his resignation he’s received a monthly consulting fee of $104,166.
Hilton’s compensation committee was so pleased with CEO Christopher Nassetta’s performance last year that they decided to increase his total compensation package to $9.9 million last year, nearly $7.7 million more than 2013. And the committee’s delight is certainly justified in upping Nassetta’s compensation.
Last year Hilton increased its construction pipeline by 17% to 230,000 rooms, half of which were under construction as of December 2014, launched the Canopy and Curio brands, closed the $1.95 billion sale of the Waldorf Astoria New York and reduced long-term debt by more than $1 billion.
The bulk of Nassetta’s heftier compensation came from higher incentive pay, bonuses and stock awards totaling more than $8.7 million. Nassetta also exceeded his individual performance objectives by 200%, according to an SEC filing, and he can use the company’s private plane as well for business and personal travel. For Nassetta, it looks like the results of Hilton’s successful IPO in December 2013 played in his favor.
Wynn Keeps Wynning
Winning the right to build the sole integrated casino resort in the Greater Boston area last year is just one factor keeping Wynn the highest paid hospitality CEO.
Wynn Resorts compensation committee awarded Wynn a windfall in additional stock options in 2014 for helping deliver what the committee called a “year of significant accomplishment” for returning more than $600 million to stockholders and developing new properties positioning the company for long-term growth. Indeed most of the nearly $7 million year-over-year increase in Wynn’s total compensation came from additional stock awards.
“The compensation committee believes that Mr. Wynn’s significant stock ownership in the Company aligns his interests with that of stockholders and as such Mr. Wynn has not historically participated in the Company’s equity incentive plans,” a recent SEC filing for the company stated. “However, for the 2014 annual incentive awards, the compensation committee paid a significant portion of Mr. Wynn’s annual incentive award in equity.”
Since the company’s IPO in 2002 until last year, the committee attributes Wynn’s leadership to returning about $5.9 billion to stockholders and Wynn himself owns 10% of the company’s stock.
There’s also no shortage of lavish perks for gaming CEOs: Wynn received a villa as part of his compensation before the company made him pay half a million dollars a year to lease it in 2013. Las Vegas Sands CEO Sheldon Adelson, for example, is entitled to $100,000 reimbursement annually for personal legal and financial planning fees, exclusive use of an automobile and a driver of his choice, use of a Boeing Business Jet for business travel and security detail for he and his family.
Following are the highest compensation hotel CEOs among public companies in 2014:
Top 10 Hotel CEO Pay Packages of 2014
|Hotel Brand||CEO||Salary||Stocks, Options, Incentives, Bonus, Pension Change||All Other Compensation||Total|
|1. Wynn Resorts||Steve Wynn*||$4,000,000||$20,000,000||$1,322,854||$25,322,854|
|2. Marriott International||Arne Sorenson||$1,236,000||$13,538,862||$117,974||$14,892,836|
|3. Wyndham Worldwide||Stephen Holmes*||$1,500,008||$11,510,022||$1,101,861||$14,111,891|
|4. Starwood Hotels||Frits van Paasschen***||$1,250,000||$10,570,815||$181,128||$12,001,943|
|5. Las Vegas Sands||Sheldon Adelson**||$1,000,000||$7,362,026||$3,629,698||$11,991,724|
|6. MGM Resorts||James Murren*||$2,000,000||$7,581,529||$601,630||$10,183,159|
|7. InterContinental||Richard Solomons||$1,178,358||$8,955,218||$10,133,576|
|8. Hilton Worldwide||Christopher Nassetta||$1,142,201||$8,709,374||$50,639||$9,902,214|
|9. Hyatt Hotels||Mark S. Hoplamazian||$1,035,833||5,188,686||$41,962||$6,266,481|
|10. Choice Hotels||Stephen Joyce||$958,846||$4,124,336||$233,871||$5,317,053|
Source: Securities and Exchange Commission filings
* Chairman and CEO
** Sheldon Adelson is Las Vegas Sands’ chairman, CEO and treasurer
***Frits van Paasschen resigned as Starwood’s CEO in February 2015
Note: All of the other CEOs listed are president and CEO of their companies