Salaries, bonuses detailed for two Strip executives

Wednesday, March 28, 2001 | 11:11 a.m.

SUN STAFF AND WIRE REPORTS

Terry Lanni's paycheck more than doubled in 2000 on the heels of a historic year for his company, MGM MIRAGE of Las Vegas.

But Phil Satre, chairman of Harrah's Entertainment Inc. of Las Vegas, saw his bonus decline drastically in 2000, as a variety of factors combined to produce a disappointing year for his company.

Las Vegas-based MGM MIRAGE, controlled by billionaire Kirk Kerkorian, awarded Lanni $885,572 in salary and a bonus of $2.5 million for duties he assumed in February 2000, according to a filing submitted Tuesday to the Securities and Exchange Commission. That's up from the $1.35 million in pay Lanni received in 1999.

Far more lucrative, however, could be the 1 million stock options awarded to Lanni. Those options carry a potential value of $44 million, assuming MGM MIRAGE shares appreciate at a 10 percent rate for each of the next 10 years. In 1999, Lanni received no options.

The 58-year-old Lanni resigned as chairman and chief executive in late 1999, saying he wanted to spend more time with his family. Lanni returned as chairman in February 2000, and led MGM Grand Inc.'s $6.4 billion takeover of Mirage Resorts Inc., which closed in May 2000. Lanni again resumed the CEO role at MGM MIRAGE earlier this month.

MGM MIRAGE posted earnings per share of $1.70 in 2000, up from $1.18 in 1999, largely because of the Mirage acquisition.

Meanwhile, Harrah's paid Satre $1.58 million in 2000, a decline of 27 percent from his 1999 paycheck. Though Satre's salary rose from $903,000 to $1.11 million in 2000, his bonus was $360,000, a 67 percent cut over 1999.

However, Satre was awarded 350,000 options to purchase Harrah's stock at $28.81 per share. Assuming Harrah's stock were to appreciate 10 percent annually over the next 10 years, those options would be worth $16.1 million, according to Harrah's SEC filing.

Harrah's bases its bonuses on a system tied to a target earnings-per-share figure; if that target is met, top executives are entitled to receive 50 percent to 60 percent of their annual salary as a bonus. The 2000 bonuses reflected earnings "below target level," the filing indicated, as most Harrah's top executives saw a substantial reduction in their bonuses.

Harrah's lost 10 cents per share in 2000, compared to net income of $1.62 in 1999. Harrah's earnings were hammered by three primary factors -- the struggles and ultimate bankruptcy of its New Orleans casino; the bankruptcy of National Airlines, of which Harrah's owns half; and a substantial decline in the financial performance of the Rio, which Harrah's blamed largely on poor hold.