Outgoing MGM Resorts CEO Jim Murren Named to Overpaid Executives List, Salary 355x Average Worker

Posted on: February 29, 2020, 06:00h. 

Last updated on: February 28, 2020, 04:17h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

MGM Resorts CEO Jim Murren is overpaid. That’s according to As You Sow, a nonprofit that works to promote shareholder advocacy in publicly traded companies.

MGM Resorts Jim Murren CEO
MGM Resorts is in search of a new CEO following Jim Murren’s announcement that he plans to step down this year. (Image: Billie Weiss/Getty)

This week, As You Sow released its sixth annual list of “The 100 Most Overpaid CEOs,” and Murren is the gaming industry’s lone representative. The MGM boss, who announced recently that he will depart the company prior to his current contract’s expiration on December 31, 2021, ranked No. 74 on the list.

According to the As You Sow report, Murren’s compensation totaled $12,849,021 in 2018. The median pay of an MGM employee was $36,192, meaning his earnings were 355 times the average worker.

“CEO pay at public companies is a significant contributor to income inequality, and it is one shareholders get to – and need to – vote on,” said former US Secretary of Labor Robert Reich. “New data shows that at multiple companies, 100 employees working for a decade would not bring home what the CEO is paid in one year.”

This explosion in CEO pay relative to the pay of average workers isn’t because CEOs have become so much more valuable than before,” Reich added. “It’s not due to the so-called ‘free market.’ It’s due to CEOs gaming the stock market and playing politics.”

As You Sow says its report on CEO pay uses total disclosed compensation as reported under US Security and Exchange Commission (SEC) requirements.

MGM Shareholders

When Murren does depart the casino giant that is Nevada’s largest employer, he’ll be shown the door with a fortune.

SEC filings made earlier this month from MGM suggest his exit package will be north of $30 million. That number includes a “cash severance payment” of $12 million. And after he’s no longer CEO, Murren will transition to a consultant with MGM and be paid $575,000 a month.

Seem excessive? Some shareholders say so. During the most recent investor vote regarding Murren’s contract, 13.5 percent of all votes were against the compensation structure.

However, Murren’s pay isn’t exactly outrageous compared to his gaming industry peers. In 2018, Casino.org published a report revealing annual compensation for CEOs of Nevada’s largest casino operators, and Murren ranked No. 4 behind Steve Wynn ($34.5 million), Sheldon Adelson ($26 million), and then-Caesars CEO Mark Frissora ($23.9 million).

Defining Overpaid

Murren, of course, isn’t alone in making hundreds of times what the average worker does compared to their CEO. But As You Sow says its list of 100 executives make far more than they would if their pay was based on performance.

High CEO pay has long been warranted on the basis that it’s compensation for the chief executives providing high shareholder returns. As You Sow says it “uses a statistical regression model to compute what the pay of the CEO would be, assuming such pay is related to cumulative total shareholder return over the previous five years.”

Murren is said to have been overpaid to the tune of $772,754 last year.