While some casino companies we won’t name (coughBoyd Gamingcough) are responding this week to the bad economy with downsizing their workforce, others are setting a nobler example.
Executives at both Isle of Capri Casinos and Trump Entertainment Resorts are literally taking it in the wallet, sharing the pain that is customarily meted out to line employees. Trump spreads the sting of a 5% salary decrease across 21 executive positions. But even that noble gesture pales next to what happened at Isle. CEO James Perry, COO Virginia McDowell, Chairman Bernard Goldstein and Vice Chairman Robert Goldstein imposed a 25% — 25%!!! — pay cut on themselves, retroactive to Nov. 1. (You see why these are some of the most admired executives in the casino biz.)
Both companies are in serious turnaround mode and leadership is really putting its money where its mouth is with these sweeping moves, which should be a tonic for corporate morale. Isle will also be a little heavier in the wallet now that Executive Vice President Allan B. Solomon has stepped down and no replacement has been named. Solomon was part of the old Goldstein crew that led Isle to prominence but arguably stuck around too long while other companies caught up with and passed them.
Recently, MGM Mirage made a big show of forgoing end-of-year bonuses but, as you read here, that was a sham. Show me some Vegas bigwigs who did what the Isle and Trump brass did and then we’ll talk. So might ex-Borgata dealer Stanley Silow, who took issue with management’s resort to the meat-cleaver approach: “They’re kind of cold about it. I know business has declined and all that, but they didn’t even attempt to reduce hours. They just cut.”
The morale-boosting gesture at Trump couldn’t come at a timelier juncture. Third-quarter numbers were horrible, representing 74% of the $188 million TER has lost this year, including a $46 million markdown on the sale price of Trump Marina and a further $62 million, Marina-related writedown. The company says it hasn’t laid off any employees this year (though some attrition appears to be taking place), which bolsters CEO Mark Juliano‘s contention that staff can’t be reduced any further without shuttering big chunks of the operation. If there’s a silver lining, it’s that most of the lumps taken were in the nature of one-time charges and most of whatever bruising is likely to be done to TER this year has been done.
A guy who ‘gets it.’ Few TV reporters display any degree of expertise when covering the casino industry. A sterling exception is KVBC-TV‘s Steve Crupi, as this report on the potential collapse of Las Vegas Sands demonstrates. Very thorough. Crupi really knows his shit — though I don’t think he’ll put that quote on his resumé.
