Caesars new CEO to earn $1.8 million, eligible for bonus
Caesars Entertainment’s new chief executive will earn $1.8 million a year in salary, according a filing Thursday with the Securities and Exchange Commission.
Mark Frissora, who was named CEO designee by the casino operator on Wednesday, can also earn up to 150 percent of his base salary in bonus pay, has use of the company aircraft, and will receive “certain relocation benefits” for moving to Las Vegas, the SEC filing said.
Frissora, 59, spent seven years as chairman and CEO of automobile and equipment rental car company Hertz Global Holdings. On July 1, he will replace Gary Loveman as CEO of the casino company.
Over the next four months, Frissora will work with Loveman, who will remain chairman of Caesars after the CEO transition.
According to the SEC filing, Frissora was awarded an option to purchase 1 million shares of Caesars Entertainment common stock.
Loveman, who has been with Caesars since 1988 and was CEO since 2003, earned more than $7.6 million in salary and other compensation in 2013.
The CEO change comes less than a month after Caesars placed its largest operating unit into a pre-packaged bankruptcy to eliminate almost $10 billion in debt. The reorganization, overseen by the U.S. Bankruptcy Court in Chicago, may take up to a year to finalize.
Caesars, which has a gaming industry-high $22.8 billion in long-term debt, has been attempting to restructure its leverage for several years. The restructuring of Caesars Entertainment Operating Co. will reduce the division’s $18.4 billion debt load.
Caesars is seeking court approval to convert CEOC into a publicly traded real estate investment trust. CEOC controls Caesars Palace, Caesars Atlantic City, Harrah’s Reno and more than a dozen regional properties.
Caesars is majority owned by private equity firms TPG Capital and Apollo Global Management.
Wall Street had a somewhat mixed reaction to the management change Thursday, a day after the news was revealed following the markets closing bells. On Thursday, shares of Caesars, traded on the Nasdaq, closed at $11.51, up 22 cents or 1.95 percent amid a broad market rally.
Kim Noland, director of high yield research, at Gimme Credit, an independent research service on corporate bonds, said Frissora has experience with public and private companies, but his departure from Hertz last fall causes some concern.
“Hertz is facing accounting issues dating back three to four years,” Noland said.
The CEO change was not a surprise, Noland said, adding “the decision may be mutual with the private equity owners who are looking for a longer term plan for the remaining entities.”
Fitch Ratings analyst Alex Bumazhny said Frissora’s background in the auto rental industry might seem a bit unusual initially.
“Running a casino company would take some getting used to,” Bumazhny said. “But there are some core competencies Frissora can leverage at Caesars from his Hertz days, including managing complex customer data, information technology and logistics.”
Loveman, a former Harvard Business School associate professor, didn’t have “your stereotypical casino CEO” background when he took over the company, Bumazhny said.
MGM Resorts International Chairman Jim Murren wished both Loveman and Frissora well through a statement. He pledged to work with both executives during the next four months.
“Gary is a thought leader and a forerunner in our industry in many areas,” Murren said. “More than that, he is a friend. Along with his colleagues throughout the industry, I extend our best wishes in his transition.”
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Find him on Twitter: @howardstutz.
