This article was found by ECE member Tom Anderson of UBS.

Amid cost cuts, executives’ pay raises hackles

Workers see contrast with their worsened fortunes

By Liz Benston (contact)

Mon, Jun 15, 2009 (2 a.m.)

When Station Casinos last year reported that top executives
exercised more than $200 million in stock options triggered by a $9
billion management-led buyout by a private investment company in late
2007, critics attacked the lavish rewards, which made Station bosses
the highest paid local executives in 2008.

That criticism is being repeated now that debt accumulated from the deal will force Station to seek bankruptcy protection.

That executive pay report was released in June 2008, before the
downturn worsened and led to waves of casino layoffs. For casino
workers who still have jobs, extensive belt-tightening programs have
resulted in cuts to benefits, fewer work hours and heavier workloads.

It’s no surprise, then, that recent filings by Harrah’s
Entertainment revealing the value of stock options exercised by
executives in the wake of the company’s leveraged buyout in January
2008 appear to be eliciting a stronger response from the public as well
as Harrah’s workers.

For locals who have lost jobs or fear for them each day, the fact
that Harrah’s CEO Gary Loveman received $89.1 million in 2008 from the
sale of stock and options feels like a punch in the stomach. Loveman, the highest-paid executive
at any publicly traded company based in Las Vegas, also took home a
base salary of $2 million, though he received no bonus or
incentive-based cash payments last year.

The value of stock options exercised in the wake of the buyout
boosted other Harrah’s executives to the top of the list of
highest-compensated local executives for 2008. No. 2 executive J.
Carlos Tolosa, Harrah’s Eastern Division president, reported
$15.7 million in compensation, including a base salary of $1.1 million
and $14 million in gains from stock and option sales. Former Chief
Financial Officer and Vice Chairman Charles Atwood ranked third with
compensation of $13.1 million in 2008, including a salary of $1.3
million and $11.8 million in gains from stock and option sales. (The
list, compiled from Securities and Exchange Commission filings, ran two weeks ago in the Sun’s sister publication In Business Las Vegas.)

Like Station, Harrah’s went private with the help of private equity
money at the worst possible time, accumulating billions in debt just
before the recession

http://www.lasvegassun.com/news/2009/jun/15/amid-cost-cuts-executives-pay-raises-hackles/