Sale of Cosmopolitan would benefit executive, filing shows

In an unusual twist on executive compensation, a part of The Cosmopolitan of Las Vegas CEO John Unwin’s pay “is designed to reward the successful sale and disposition (of the hotel) in the time frame desired by the board,” company documents filed with the Securities and Exchange Commission reveal.

However, neither “successful sale” nor “desired time frame” were defined.

Last year, Unwin was paid $800,000 in salary plus a $1 million bonus for what was deemed The Cosmopolitan’s successful opening in December. He also received $25,000, mostly as a contribution to his 401(k) retirement plan.

The board of directors of Nevada Property 1 LLC, the ownership entity created by Deutsche Bank, eschewed the award of stock or stock options to avoid “motivat(ing) any imprudent risk-taking.” Such incentives are common for executives.

Instead, Unwin received certain bonuses depending on what happens to The Cosmopolitan. If the hotel is sold and the new owners do not replace him, he would receive $4.5 million cash, although that could rise if the sales price is high.

Unwin will also receive the $4.5 million if he is still CEO at the end of his four-year contract in October 2013, or if the hotel is shut down during his tenure.