As long as the coronavirus continues rattling the gaming industry, Red Rock Resorts (NASDAQ:RRR) leaders Frank and Lorenzo Fertitta will not take salaries.
Frank and Lorenzo Fertitta are eliminating their Station Casinos salaries amid the COVID-19 pandemic. (Image: Forbes)
The parent company of Station Casinos made the announcement on Monday, saying Chairman/CEO Frank Fertitta and his brother, Vice Chairman Lorenzo, will forego cash salaries for the remainder of the COVID-19 pandemic. They join a long line of gamine industry executives that are altering compensation schemes as their companies struggle with the impact of the coronavirus outbreak.
The most readily available data with the Securities and Exchange Commission (SEC) indicates CEO Frank Fertita had a 2018 salary of $1 million, while his brother was paid $500,000. Those figures don’t include any equity-based compensation.
The company also announced it’s donating $1 million to Nevada’s COVID-19 response efforts.
In this time of profound crisis, nothing is more important to us than the health and well-being of our team members, guests, and the entire Las Vegas community,” said Station Casinos President Richard Haskins in a press release.
Red Rock added that it’s paying all hourly and salaried workers through the end of this month, and that part-time staffers are moving to full-time status so they can accrue those benefits, too.
Joining The Party
The Fertitta brothers join a now-lengthy list of gaming executives that are altering compensation plans or scrapping cash salary altogether amid the coronavirus outbreak.
Nevada is in the midst of a temporary closure of non-essential businesses, including casinos, that’s expected to last until the end of April. All other commercial and tribal gaming properties across the US are shuttered as well, and device manufacturers, operators and sportsbook managers are among the companies where high-ranking executives are eliminating or reducing pay to conserve cash.
One of the first to get that ball rolling was Wynn Resorts (NASDAQ:WYNN). As Casino.org reported in late March, CEO Matt Maddox is moving to 100% equity compensation for the remainder of 2020, and some other directors and executives are following suit.
The Fertitta brothers can handle the salary pinch. They sold UFC in 2016 for $2 billion, and they own tens of millions of dollars worth of Red Rock shares.
Perhaps a Good Move
While Red Rock hasn’t been mentioned as being one of the more financially strained gaming companies, cutting some higher compensation costs, albeit temporarily, could be a sound idea for a company that recently had its credit rating downgraded.
Last month, Moody’s Investors Service took the gaming company further into junk territory to B2 from B1, citing the disrupted business environment created by COVID-19.
“The downgrade of Station’s CFR is in response to the disruption in casino visitation resulting from efforts to contain the spread of the coronavirus, including recommendations from federal, state, and local governments to avoid gatherings and avoid non-essential travel,” said the ratings agency. “These efforts include mandates to close casinos on a temporary basis.”