Earlier this week, MGM Resorts’ CEO Bill Hornbuckle announced that the company was pledging $1m only for an ‘employee emergency grant fund’ “to give more support to workers affected by Coronavirus and those experiencing hardships. In contrary, the Casino gave its outgoing CEO Jim Murren a whooping $32m golden handshake.
Last month, the Casino reported that its outgoing CEO Jim Murren, who was replaced by Hornbuckle, would get a golden handshake of nearly $32m. This would cater for the combo of salary, stock, bonuses and monthly ‘consulting fees’. MGM’s domestic activities are currently on hold as the country tries to halt further spread of the Coronavirus just like like all US casino operators.
Murren (pictured) announced his intention to leave MGM last month, and head up to Nevada’s coronavirus task force. MGM reported that his resignation was not “due to any disagreement” with the company. As a result, it had decided to treat his early exit as “termination without good cause,” thereby allowing Murren to claim his full compensation package “in exchange for a release of claims against the company.”
The golden handshake did not go well with rank-and-file staff, who only received $1m to be divided among about 74,500 employees. It’s good to remember that Murren sold $22.2m of MGM stock in February, just before the share price fell by 73%. Had he waited, Murren would have pocketed about $16m. Kudos for knowing when to fold them. Keep in mind that this is a company that reaped a $1.4b windfall from President Trump’s tax cuts. Instead, MGM decided to trim 3% of its workforce.
The fine print on the federal government’s new $2 trillion stimulus package is believed to have clauses that restrict any company from using bailout funds for stock buybacks or executive bonuses. Murren was among the industry representatives who travelled to Washington to pitch Congress on a coronavirus bailout package.