Jim Murren, who earlier this week announced his intention to step down as the chairman and CEO of MGM Resorts International before his contract expires at the end of next year, will receive a compensation package totaling more than $30 million. That’s according to a document the Las Vegas-based gaming and hospitality company filed with the US Security and Exchange Commission (SEC) late Friday afternoon.
The new document states Murren will continue to receive his current annual base salary of $2 million through the end of the year, regardless of when he officially steps down. He mentioned on Wednesday’s fourth-quarter earnings call that he intended to stay on as CEO at least through the next call, which will take place in mid-spring.
The press release announcing Murren’s decision also stated he would remain in his position until the company names a successor. An executive search firm and a committee of board members are working to identify candidates. The agreement released Friday indicates Murren will remain on as a senior advisor during a transition period after the new CEO takes over the company.
In addition, Murren will also receive a $4 million cash bonus at the end of the calendar year. That’s the same target bonus he’s been able to receive as part of the five-year contract he signed in October 2016. In addition, MGM will also award Murren with $7 million in restricted stock as an “equity award” similar to what other senior executives can receive.
Shares of the company stock (NYSE:MGM) fell by 28 cents in trading Friday to end the week at $31.52.
On top of that equity award, the 58-year-old will also receive a lump-sum “cash severance payment” of $12 million at the end of 2020, when MGM expects the official transition period to end.
From CEO to Consultant
Beyond the transition period, Murren has also agreed to work as a consultant at the sole discretion of the MGM Resorts International Board of Directors. For that, he will earn $575,000 a month. Those services could include supporting “the Company’s efforts to identify a permanent CEO” should his successor not be in place by the end of this year.
The agreement does not mandate that Murren devote a set amount of time for his consulting work with MGM, and he may do other consulting work provided it does not conflict with a non-compete clause.
The 12-month non-compete clause will be in effect until Dec. 31, 2022, unless his consulting work is terminated prior to the end of 2021.
For comparison purposes, when Mark Frissora stepped down as Caesars Entertainment’s chief executive, he received an $8 million severance, a six-month consulting contract valued at nearly $500,000, and other bonuses and benefits that the company said would bring the total value to $30 million.
Focus on Japan, Sports
Murren started with MGM Resorts in 1998 as the company’s CFO and a board member. A year later, he assumed the helm of president and COO, and became the company’s CEO and board chair in December 2008.
Leading MGM resorts as CEO for the past 12 years has been the most rewarding and fulfilling experience in my professional career,” he said on Wednesday’s call. “And I want to thank our talented employees for all of their support and dedication. Together, we transformed MGM Resorts into a global entertainment company with a worldwide footprint, while creating significant value for our shareholders.”
Later on in the call earlier this week, Murren said he will spend most of his remaining time as CEO looking to grow the company’s sports and entertainment sector as well as overseeing MGM’s efforts to land a Japanese casino resort license.
Later this year, Murren is expected to lead a contingent of MGM officials to meet with officials in Osaka to pitch the company’s vision for an integrated casino resort in Japan’s second-largest metropolitan area.