Concerned that the expiration of existing contracts might result in the loss of talent, members of the board of directors of MGM MIRAGE Inc. (MGG) has negotiated employment contracts with five of its senior executives, locking them into their positions through July of 2006.
Involved were Terry Lanni, chairman and chief executive officer; Jim Murren, president, chief financial officer and treasurer; Bobby Baldwin, president and CEO of Mirage Resorts; John Redmond, president and CEO of MGM Grand Resorts, and Gary Jacobs, executive vice president, general counsel and secretary.
Making the announcement was James Aljian, chairman of the company’s compensation and stock option committee.
"With the support of our board of directors, " Aljian said, "the compensation and stock option committee embarked on a program to realize the benefits of continuity and stability from our successful management team by securing their long-term services."
The company’s revised executive program has two components: signing new employment agreements with certain senior executives and the creation of a new restricted stock plan.
"The merger two years ago between MGM Grand Inc. and Mirage Resorts has been enormously successful," Aljian said. "In consideration of the fact that there will be continued demand for top talent in the industry, the board believed it was a strategic imperative to keep this team with MGM MIRAGE into the foreseeable future."
Involved in the employment agreements, and their annual compensation are: Lanni, $2,000,000 and 150,000 shares of restricted stock; Murren, $1,200,000 and 75,000 shares; Baldwin, $1,500,000, and 75,000 shares; Redmond, $1.3 million and 75,000 shares, and Jacobs $700,000 and 25,000 shares.
Also because the company plans on developing new gaming sites, the company entered into an employment agreement with Ken Rosevear, an individual who was important in developing relationships in South Africa. Rosevear’s contract extends to Aug. 6, 2006 with annual compensation of $675,000.