Coronavirus felt in casino industry; MGM executives take pay cuts, buy stock to build confidence

by Administrator

MGM Resorts International acting CEO and president William Hornbuckle took a $300,000 pay cut this week and agreed to take his new $1.1 million salary in stock, not cash.

Two other MGM executives also took pay cuts and Hornbuckle and other insiders bought stock in MGM Resorts International, the parent company of MGM Springfield, according to documents filed with the federal Securities and Exchange Commission.

The stock — MGM on the New York Stock Exchange — traded at $11.77 a share Wednesday afternoon

The moves show one way that MGM Resorts International is adjusting to a tougher financial reality with resorts, and most everything else, closed in the face of the novel coronavirus.

The stock has fallen from $33.66 in February to just under $12 in trading Wednesday, a 65% drop.

MGM’s resorts are closed, including MGM Springfield, where employees began running out of two-weeks’ notice pay this week and started qualifying for unemployment.

The Massachusetts Gaming Commission has extended shutdowns at all three of the state’s casinos — MGM, Plainridge Park and Encore Boston Harbor — until at least April 7. But that’s expected to get extended again to match a general statewide stay-at-home advisory that will last until May.

Hornbuckle was named acting CEO and president three weeks ago. He replaces Jim Murren, who’d already announced his departure.

MGM chief financial officer Corey Sanders agreed to a $1 million base salary, which was reduced from his prior salary of $1.25 million. Sanders will take take half of his base salary for the year’s remaining pay periods in stock.

Similarly, John McManus, executive vice president and general counsel, agreed to a base salary of $700,000 per year which was reduced from his prior salary of $850,000. He likewise will take half that in stock.

All three men are also eligible for bonuses, according to the documents.

In Hornbuckles case, that’s an annual target bonus equal to 150% of Hornbuckle’s base salary, which was reduced from his prior annual target bonus of 175%. It works out to a decrease to his annual target bonus of $800,000, and certain other benefits.

In stock purchases, Hornbuckle bought 41,000 shares of MGM Resorts, spending about $496,177. The shares were traded at between $11.99 and $12.02.

He was joined by other executives and members of the company’s board of directors, according to paperwork filed Wednesday.