For the fourth year in a row, Wynn Resorts co-founder Steve Wynn took home the biggest paycheck of all hospitality CEOs.

The disgraced casino mogul, who was forced to resign from his company earlier this year after multiple allegations of sexual abuse and harassment were made against him, received a total compensation package of $34.5 million in 2017, which is worth 777 times more than the salary of a median full-time Wynn Resorts employee.

Wynn’s number, while staggering in comparison to other hospitality CEOs, aligns with what he has made in previous years, although last year’s compensation did represent an increase of nearly $6.4 million from the previous year. His total compensation was close to $28.2 million in 2016, approximately $20.7 million in 2015, and $25.3 million in 2014.

Wynn wasn’t the only hospitality CEO who enjoyed a financially successful 2017. Las Vegas Sands CEO Sheldon Adelson received a total compensation package of $26 million in 2017, followed by Wynn’s successor, current Wynn Resorts CEO and former chief financial officer Matt Maddox, who received $24.8 million.

Gaming CEOs traditionally receive much higher compensations packages than their hotel-only CEO peers, and that stayed true in 2017. The highest paid hotel CEO in 2017 was Hilton CEO Chris Nassetta, who received nearly $18.8 million.

Overall, the fact that most hospitality CEOs saw their compensation packages increase in 2017 is an indicator of the strength of the industry, said Keith Kefgen, managing director and CEO at Aethos Consulting Group, a global hospitality industry advisory firm.

Kefgen noted that increases in both short-term and long-term incentives for hospitality CEOs in 2017 demonstrated “that financial metrics in the hotel industry last year were pretty solid.” He noted that short-term incentives rose, on average, to $850,000, which is more than 100 percent the average base salary for hotel CEOs. The average long-term incentive plan was 2.5 times the average base salary, which is also a “pretty significant bump from previous years.”

The only hotel CEOs who saw a dip in their total compensation in 2017 were MGM Resorts CEO James Murren, Hyatt CEO Mark Hoplamazian, Choice Hotels CEO Pat Pacious, former InterContinental Hotels Group (IHG) CEO Richard Solomons, and AccorHotels CEO Sebastien Bazin.

Notably, regional differences in CEO compensation remain as well. European hotel CEOs compensation packages were noticeably smaller than those of their American counterparts. Hyatt’s CEO, who oversees a portfolio of more than 600 hotels, made close to $9.9 million in 2017, whereas AccorHotels CEO, whose hotel portfolio includes nearly 4,300 hotels, took home $1.9 million.

“There are regional constraints to executive pay,” Kefgen said. He also noted that IHG may want to consider paying its CEO, Keith Barr, more, because “it would be easier for a competitor to recruit him to a U.S. company and pay him three times what he is making today versus someone who has to get sponsored and get a working permit and go through all of that, especially in the era of Trump.”

More CEO Turnover

A considerable amount of change in hotel executive leadership in 2017 may help to explain why Choice Hotels’ Pacious and IHG’s Solomons saw smaller compensation packages. IHG CEO Richard Solomons stepped down and was replaced by Keith Barr in July. Longtime Choice Hotels CEO Stephen Joyce’s departure from the company, and Pat Pacious’ succession to CEO, was accelerated by a few months in the fall.

While both changes in CEO roles were expected, Kefgen said he noted an “abnormal amount of change at the CEO level in the past two years,” which was “more than any time [he] can remember from the last 20 years of doing a study” of hospitality CEO compensation.

Although Maddox became Wynn Resorts CEO in 2018, his considerable compensation package for 2017 is being questioned by the company’s majority shareholder, co-founder Elaine Wynn. In an April letter Wynn penned to shareholders, asking them to withhold votes for longtime board director John Hagenbuch, she described Maddox’s compensation as “exorbitant for a first-time untested public company CEO,” and a symbol “that very little has changed” with regard to how the Wynn Resorts board is managing the company.

“In recent years, shareholders and proxy advisors have repeatedly criticized the company’s executive pay practices for not being correlated to performance,” Wynn also wrote, referencing the high compensation packages paid to her ex-husband, Steve Wynn, and noting that his pay was “called into question in 2015.”

Pay Ratios

This year marked the first year that the U.S. Securities and Exchange Commission required companies to report a CEO pay ratio, or how much CEOs make in comparison to their employees.

In Wynn’s case, he made 777 times more than his median full-time employee. Nassetta made 325 times more than the median compensated employee at Hilton.

It’ll be interesting to see if reporting of CEO pay ratios equates to an increase in shareholder say-on-pay proposals going forward. Kefgen, however, doesn’t see the pay ratios having much of an impact on how much CEOs are paid.

“It doesn’t take a great deal of mathematic wizardry to figure out how much more a hotel CEO is getting paid than his average employee,” Kefgen said. “The government wants to look out for constituencies and create policies like this, but unless they say you can’t pay a CEO more than X number of times than the average employee, [companies] will never do that.”

In short, he believes CEO pay ratios are an attempt by the government to “try to guilt companies with bad press” and ultimately, he doesn’t’ “see it affecting executive pay.”

Best-Paid Hotel CEOs of Public Companies in 2017

Hotel BrandTitleName2017 Total Compensation2016 Total CompensationDifferenceMedian Compensated EmployeeCEO Pay Ratio
Wynn ResortsPresident and CEOStephen Wynn$34,522,695$28,156,985$6,365,710$44,437777 times
Las Vegas Sands Corp.Chairman of the Board, CEO, and TreasurerSheldon Adelson$26,086,499$12,707,449$13,379,050$34,908747 times
Caesars Entertainment GroupPresident and CEOMark Frissora$23,948,193$9,510,932$14,437,261$39,870601 times
Hilton Hotels & ResortsPresident and CEOChristopher Nassetta$18,790,698$11,001,328$7,789,370$33,168325 times
Choice Hotels InternationalFormer President and CEOStephen P. Joyce$15,824,934$6,018,349$9,806,585$76,523*207 times
Wyndham WorldwidePresident and CEOStephen P. Holmes$15,080,145$10,535,048$4,545,097$37,934398 times
MGM Resorts InternationalChairman of the Board and CEOJames J. Murren$14,579,720$16,609,696($2,029,976)$36,785396 times
Marriott InternationalPresident and CEOArne Sorenson$13,311,617$12,298,378$1,013,239$33,697395 times
Hyatt Hotels & ResortsPresident and CEOMark Hoplamazian$9,872,656$10,700,353($827,697)$33,121298 times
Wyndham Hotel GroupPresident and CEOGeoffrey Ballotti$4,880,554$4,584,872$295,682$37,934129 times
Choice Hotels InternationalPresident and CEO as of Sept. 12, 2017Patrick Pacious$4,004,065$4,755,233($751,168)$76,52352 times
InterContinental Hotels GroupFormer President and CEORichard Solomons**$2,956,140$4,968,052($2,011,912)N/AN/A
InterContinental Hotels GroupPresident and CEO as of July 1, 2017Keith Barr**$2,885,595N/AN/AN/AN/A
AccorHotelsPresident and CEOSebastien Bazin***$1,903,693$2,999,899($1,096,206)N/AN/A

Source: Company SEC Filings

* In Choice Hotels’ SEC filing that includes information on CEO pay ratio, it used a total CEO compensation of $5,441,201, reflecting Pacious’ annualized compensation were he CEO for a full year, to calculate a pay ratio of 71 times the median pay of a Choice Hotels employee. For this chart, we have recalculated the CEO pay ratio according to the actual 2017 total compensation packages received by Holmes and Pacious, using the median $76,523 salary that Choice Hotels used in its original filing.

** Originally reported in pounds sterling.

*** Originally reported in euros.

 

Photo Credit: Hilton CEO Chris Nassetta was one of the highest paid hospitality CEOs in 2017. Hilton