Thousands of Caesars Entertainment workers have been furloughed or lost their livelihoods in the Covid-19 crisis, and it’s fairly certain many more will follow. But that isn’t stopping several top executives from lining up for hefty pay raises.
The company’s reconstituted board of directors, now controlled by merger partner Eldorado Resorts, whose $17.3 billion acquisition of the Las Vegas-based casino giant closed last month, voted increases for Executive Chairman Gary Carano; CEO and director Thomas Reeg; Carano’s son Anthony Carano, who is president and COO; CFO Bret Yunker; and Chief Legal Officer Ed Quatmann.
Carano and Reeg were the principal architects of the aggressive acquisitions strategy that grew Eldorado from a family-owned operator of three Reno casinos to a publicly traded regional gaming giant in the space of five years, culminating in the 2019 deal for Caesars they engineered with corporate raider Carl Icahn, who at the time had amassed a controlling stake in Caesars for the purpose of forcing a sale.
A Caesars filing with the Securities and Exchange Commission announcing the salary increases said they “reflect the increased roles and responsibilities of the named executive officers going forward.”
Carano, who was chairman of Eldorado, will see his base pay rise from $1.1 million to $1.4 million.
Reeg, who was Eldorado’s CEO and a member of the board, will see his base rise from $1.6 million to $2 million, with bonus opportunities increasing to 200 percent and 350 percent longer term.
Anthony Carano, who was president and COO of Eldorado, is getting a $300,000 raise to $1.3 million. Yunker, who was Eldorado’s CFO, is moving up from $750,000 to $1 million. Quatmann, who was Eldorado’s CLO, is moving up from $600,000 to $750,000.
In addition, Yunker’s bonus potential is rising to 125 percent of his new base and Quatmann’s to 100 percent with the potential for 150 percent long-term.
“A lot of this was agreed to, probably, before the pandemic hit,” Brendan Bussmann, director of government affairs for industry consultants Global Market Advisors, told the Las Vegas Review-Journal.
Toni Repetti, an associate professor at the William F. Harrah College of Hospitality at the University of Nevada, Las Vegas, agreed to the extent the raises may have been contemplated beforehand to ensure continuity while the merger was pending.
“When there are mergers or acquisitions, there is fear that until it closes, you may lose top employees, and they are needed to continue the current organization,” she said.
Bussmann added that the raises are not incompatible with compensation granted to top executives elsewhere in the industry.
MGM’s newly appointed President and CEO William Hornbuckle is getting an annual raise from $1.1 million to $1.5 million plus bonuses starting at 175 percent of his base.
Others in top management have taken pay cuts since the crisis hit or have relinquished their salaries or accepted shares of stock in lieu of pay. Hornbuckle, who had been serving as MGM’s acting CEO since March, had elected to take his previous salary in restricted stock.
Caesars decline to comment on the raises, the Review-Journal report said.
“Had it not been the times we are in now, I am not sure anyone would think this is out of line,” said Repetti. “Unfortunately, this deal is coming down at the same time as Covid, and in times like this when they are cutting jobs it looks bad.”
In Las Vegas in the meantime, the furloughs and layoffs continue, the latest coming at M Resort in Henderson, which announced it will permanently cut some 350 jobs by the end of August, citing “significant drags on our business will likely continue for the foreseeable future.”
Owner Penn National Gaming, which also owns the Tropicana Las Vegas, has said more than 600 workers there will be let go for good in October.
Las Vegas Sands, which will continue paying employees at least through October 31, is the only one of Nevada’s largest operators to date that has not furloughed or laid off staff.
