Former MGM Mirage Chief Executive Terry Lanni received compensation valued by the company at $5.8 million in 2008, almost 40 percent less than in 2007, according to an Associated Press analysis of a regulatory filing made Thursday.
Lanni resigned Nov. 30 and was replaced by then COO Jim Murren, who was paid $3.7 million last year by the casino operator.
Neither Murren nor Lanni received cash bonuses in 2008 as the Las Vegas-based company failed to hit its profit goals for the year. In 2007, Lanni received a $6.36 million and Murren received $4.7 million in cash bonuses, according to a proxy statement filed Thursday to the U.S. Securities and Exchange Commission.
Lanni's pay package included $2 million in salary and $1.34 million in perks, including $717,000 for company contributions to an executive retirement plan and $482,000 for personal use of a company airplane.
Murren's package included a $1.5 million salary and $442,000 in perks, mostly related to the retirement plan and his use of a company aircraft.
Lanni was granted stock and options worth $2.48 million the day they were granted, while Murren was granted stock and options worth $1.77 million. The exercise price for the options is $19, far more than the company's stock price, so they have no current value.
Shares of MGM Mirage dropped from $81.60 on Jan. 2, 2008 to $13.76 on Dec. 30. The stock is now worth about half that, and closed up 8 cents, 1.2 percent, at $6.77 on Thursday.
Murren owned 2.6 million shares in the company as of June 12, the company said, less than 1 percent of the company.
Lanni, who led the company for 13-plus years and took it from a one-casino operation to its current state as the largest casino operator on the Las Vegas Strip, had no shares left. After he retired, Lanni quickly faced questions over whether he had lied about receiving a graduate degree from the University of Southern California. The company has repeatedly denied that Lanni's retirement had anything to do with the questions, saying he wanted to spend more time with his family and pursuing other interests.
MGM Mirage's largest stockholder is billionaire investor Kirk Kerkorian, who owns 37 percent of the company's outstanding shares _ 163 million shares. Kerkorian lost his majority stake in the company in May after MGM Mirage issued new stock. The 92-year-old investor bought 14.3 million new shares, but it was not enough to maintain his 53.8 percent ownership.
MGM Mirage felt the brunt of the recession last year as consumers pulled back heavily on gambling, travel and entertainment. The lower revenue combined with a credit crunch that made it difficult for MGM Mirage to get financing for its biggest project yet, the $8.5 billion CityCenter on the Las Vegas Strip, a 50-50 partnership with Dubai World.
MGM Mirage said this week that its independent accountants no longer question its ability to continue as a company.
The company lost $855 million in 2008, compared with a profit of $1.58 billion in 2007. Its profit declined in the first three quarters as the economy started eroding, and it posted a $1.15 billion loss in the fourth quarter.
The Associated Press formula for calculating executive compensation is designed to isolate the value the company's board placed on the executive's total package during the last fiscal year. It includes salary, bonuses, performance-related compensation, perks, above-market returns on deferred compensation and the estimated value of stock and options granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
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