Top execs awarded huge option blocks

Thursday, March 23, 2000 | 11:02 a.m.

MGM Grand Inc. awarded its new chief executive officers nearly 2 million stock options in 1999 -- options that could be worth tens of millions of dollars if MGM Grand's stock can grow at a sustained rate over the next decade.

The option grants were disclosed in MGM Grand's annual report filed Wednesday with the Securities and Exchange Commission.

The largest block of options was awarded to John Redmond, who received 1.02 million options, most with an exercise price of $23.88. If MGM Grand's stock were to average a 5 percent growth rate over the next decade, these options would have a value of $14.9 million. At a 10 percent growth rate, the option value would jump to $37.9 million.

Daniel Wade received 943,000 options, also priced primarily at $23.88 each. With such an exercise price, a 5 percent annual growth rate would make the options worth $14.2 million in 2009, while a 10 percent growth rate would give them a value of $35.9 million.

Jim Murren, president and chief financial officer, also received a block of 250,000 options. A 5 percent growth rate would make these options worth $3.8 million, while a 10 percent rise would value them at $9.5 million.

The options' exercise price of $23.88 is 10 percent above current market values, making them currently unexerciseable.