DEF 14A of Caesars Entertainment, Inc.
Filed Apr 29, 2024 · FY20230001193125-24-122698
PURPOSE OF THE MEETING
PURPOSE OF THE MEETING
PURPOSE OF THE MEETING
| PROPOSAL 1 | To Elect the Ten (10) Director Nominees to our Board, Each to Serve as a Director Until the 2025 Annual Meeting of Shareholders, or Until Such Director’s Respective Successor is Duly Elected and Qualified or, if Earlier, Until Such Director’s Death, Resignation or Removal. The Board recommends that shareholders vote FOR each director nominee. The Board has nominated all ten (10) current directors, Gary L. Carano, Bonnie S. Biumi, Jan Jones Blackhurst, Frank J. Fahrenkopf, Kim Harris Jones, Don R. Kornstein, Courtney R. Mather, Michael E. Pegram, Thomas R. Reeg and David P. Tomick, to be elected to serve a one-year term until the annual meeting of shareholders in 2025 or until such director’s respective successor is duly elected and qualified or, if earlier, until such director’s death, resignation or removal. • Nominees bring extensive expertise and relevant skills to drive the Company’s success • Slate promotes diversity of viewpoints arising out of diverse experience, age and gender |
PURPOSE OF THE MEETING
| PROPOSAL 2 | To Approve, on an Advisory, Non-binding Basis, Named Executive Officer Compensation. The Board recommends that shareholders vote FOR the approval of the compensation of the Company’s named executive officers, as disclosed in this proxy statement, on an advisory, non-binding basis. We are providing shareholders with the opportunity to cast an advisory, non-binding vote on the compensation of our named executive officers as disclosed in this Proxy Statement, in accordance with Section 14A of the Securities Exchange Act of 1934, as amended. |
PURPOSE OF THE MEETING
| PROPOSAL 3 | To Ratify the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for the Year Ending December 31, 2024. The Board recommends that shareholders vote FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2024. Shareholders may vote to ratify the Audit Committee’s reappointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2024. |
PURPOSE OF THE MEETING
| PROPOSAL 4 | To Approve the Caesars Entertainment, Inc. Second Amended and Restated 2015 Equity Incentive Plan. The Board recommends that shareholders vote FOR the approval of the Second Amended and Restated 2015 Equity Incentive Plan. Shareholders may vote to approve the Second Amended and Restated 2015 Equity Incentive Plan which, among other things, increases the number of shares available and extends the right to grant awards for ten years. |
PURPOSE OF THE MEETING
| 2 | | 2024 PROXY STATEMENT |
PURPOSE OF THE MEETING
| PROPOSAL 5 | To Consider and Vote on a Shareholder Proposal Requesting that the Board of Directors Commission and Disclose a Report on the Potential Cost Savings Through the Adoption of a Smokefree Policy for Caesars Entertainment Properties. The Board recommends that shareholders vote AGAINST the shareholder proposal requesting that the Board of Directors commission and disclose a report on the potential cost savings through the adoption of a smokefree policy for Caesars Entertainment properties. The Company has received a shareholder proposal requesting the Board of Directors commission and disclose a report on the potential cost savings through the adoption of a smokefree policy for Caesars Entertainment properties. The report, prepared at reasonable cost and omitting confidential and proprietary information, should be published within six months following the 2024 shareholders meeting. |
PURPOSE OF THE MEETING
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PURPOSE OF THE MEETING
At the Annual Meeting, shareholders are being asked to elect ten (10) director nominees to our Board, each to serve as a director until the 2025 annual meeting of shareholders, or until such director’s respective successor is duly elected and qualified or, if earlier, until such director’s death, resignation or removal. Your Board believes that each of the ten nominees possesses the qualifications and attributes that are critical for effective oversight of the Company and are directly relevant to Caesars’ business, strategy and operations. Each Director nominee who receives a majority of the votes cast (i.e., the number of shares voted FOR a Director nominee must exceed the number of shares voted AGAINST that Director nominee, excluding abstentions) will be elected a Director in an uncontested election. Shareholders may not vote their shares cumulatively in the election of directors. Under our Corporate Governance Guidelines, in an uncontested election, any Director nominated for re-election who does not receive the requisite majority of FOR votes must submit an offer of resignation to the Board. The Nominating and Corporate Governance Committee must then consider all relevant facts and circumstances, including the Director’s qualifications, past and expected future contributions, the overall composition of the Board, and make a recommendation to the Board on the action to take with respect to the offer of resignation. Shares represented by all proxies received by us and not marked to vote FOR, AGAINST, or ABSTAIN, for any individual director, or for all directors, will be voted FOR the election of all of the nominees named below. If for any reason any nominee is unable to accept the nomination or to serve as a director, an event not currently anticipated, the persons named as proxies reserve the right to exercise their discretionary authority to nominate someone else or to reduce the number of management nominees to such extent as the persons named as proxies may deem advisable.
PURPOSE OF THE MEETING
| 4 | | 2024 PROXY STATEMENT |
PURPOSE OF THE MEETING
| | Gary L. Carano Executive Chairman of the Board Director since July 2020 (Director of ERI since September 2014) | | | Bonnie S. Biumi Audit Committee Director since July 2020 (Director of ERI since May 2017) | | | Jan Jones Blackhurst Corporate Social Responsibility Committee (Chair) Director since July 2020 | | | Frank J. Fahrenkopf Nominating and Corporate Governance Committee (Chair) Director since July 2020 (Director of ERI since September 2014) | | | Kim Harris Jones Board Member Director Since April 2024 | | | Don R. Kornstein Vice Chairman Compensation Committee (Chair), Corporate Social Responsibility Committee, and Nominating and Corporate Governance Committee Director since July 2020 | | | Courtney R. Mather Compensation Committee, Audit Committee, and Corporate Social Responsibility Committee Director since July 2020 | | | Michael E. Pegram Compensation Committee Director since July 2020 (Director of ERI since September 2014) | | | Thomas R. Reeg Chief Executive Officer Director since July 2020 (Director of ERI since September 2014) | | | David P. Tomick Lead Independent Director Audit Committee (Chair), Nominating and Corporate Governance Committee Director since July 2020 (Director of ERI since September 2014) |
PURPOSE OF THE MEETING
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PURPOSE OF THE MEETING
BOARD COMPOSITION AND NOMINATION PROCESS
OUR BOARD OF DIRECTORS
OUR BOARD OF DIRECTORS During 2023, our Board consisted of Gary L. Carano, Bonnie S. Biumi, Jan Jones Blackhurst, Frank J. Fahrenkopf, Don R. Kornstein, Courtney R. Mather, Michael E. Pegram, Thomas R. Reeg and David P. Tomick. In April 2024, the Board expanded from nine to ten members and elected Kim Harris Jones as a member of the Board subject to all necessary regulatory approvals. Ms. Harris Jones was identified as a potential nominee by our Nominating and Corporate Governance Committee as part of a search performed with the assistance of a third-party search firm engaged by the Board. Each of the nominees for election is a current Director and, other than Ms. Harris Jones, was previously elected at the Company’s 2023 Annual Meeting of Shareholders. Below is information as of April 15, 2024 concerning the business experience and qualifications of each of our 2024 director nominees.
OUR BOARD OF DIRECTORS
| 6 | | 2024 PROXY STATEMENT |
OUR BOARD OF DIRECTORS
DIRECTOR NOMINEES Age: 72 Director Since: July 2020 (Director of ERI since September 2014) Committees: None
EXPERIENCE
EXPERIENCE Mr. Gary L. Carano has been Executive Chairman of our Board since July 2020 and was Executive Chairman of Eldorado Resorts, Inc. (“ERI”) from September 2014 until July 2020, and Chief Executive Officer of ERI from September 2014 until December 31, 2018, when he became Executive Chairman. Previously, Mr. Gary L. Carano served as President and Chief Operating Officer of Eldorado Resorts LLC from 2004 to September 2014, and as President and Chief Operating Officer of Eldorado HoldCo LLC from 2009 to September 2014. Mr. Gary L. Carano served as the General Manager and Chief Executive Officer of the Silver Legacy Resort Casino from its opening in 1995 to September 2014. Mr. Gary L. Carano is the President and a member of the board of directors of Recreational Enterprises, Inc. (“REI”), a less than 5% shareholder of the Company and a partial owner of G PEG I, LLC, which owns and operates five casinos in the Reno and Carson City area. Mr. Gary L. Carano has served on a number of charitable boards and foundations in the state of Nevada. Mr. Gary L. Carano is Mr. Anthony L. Carano’s father.
QUALIFICATIONS
QUALIFICATIONS Mr. Gary L. Carano brings to the Board extensive experience in the gaming and hospitality industry and deep familiarity with the business of the Company. Age: 62 Director Since: July 2020 (Director of ERI since May 2017) Committees: Audit
EXPERIENCE
EXPERIENCE Ms. Biumi has served on the Board since July 2020 and served on the board of ERI from May 2017 until July 2020. Ms. Biumi was President and Chief Financial Officer of Kerzner International Resorts, a developer, owner and operator of destination resorts, casinos and hotels, from 2007 to 2012. Previously, she held senior level financial positions at NCL Corporation, Ltd., Royal Caribbean Cruises, Ltd., Neff Corporation, Peoples Telephone Company, Inc. and PricewaterhouseCoopers. Ms. Biumi was a member of the board of directors of Isle of Capri Casinos, Inc. from 2012 to 2017, Home Properties, Inc., from 2013 to 2015 and Retail Properties of America, Inc. from 2015 to 2021, all publicly traded companies, and Virgin Cruises Intermediate, a private company, from 2022 to 2023. Ms. Biumi serves on the board of Kite Realty Trust Group, a publicly traded company, and on the boards of Virgin Cruises Limited, a private company. She is a Certified Public Accountant. Ms. Biumi brings to the Board important perspectives with respect to leadership, financial and risk management and has extensive experience in corporate finance and accounting, investor relations, capital and strategic planning, mergers and acquisitions, as well as service on the boards of other public companies.
EXPERIENCE
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EXPERIENCE
Age: 75 Director Since: July 2020 Committees: Corporate Social Responsibility (Chair)
EXPERIENCE
EXPERIENCE Ms. Jones Blackhurst has served on the Board since July 2020. Ms. Jones Blackhurst served as a director of Caesars Entertainment Corporation (“CEC”) from October 2019 until the merger in July 2020. Ms. Jones Blackhurst served as Executive Vice President, Public Policy, and Corporate Responsibility of CEC from May 2017 through September 2019. Ms. Jones Blackhurst also served as Executive Vice President of Communications and Government Relations of CEC from November 2011 until May 2017 and as Senior Vice President of Communications and Government Relations of CEC from November 1999 to November 2011. Ms. Jones also served as Executive Vice President of Communications and Government Relations of Caesars Entertainment Operating Company, Inc. (“CEOC”) from November 2011 until October 2017. Ms. Jones Blackhurst has over 20 years of experience in the gaming industry and has played a key role in innovating responsible gaming programs that are now used throughout the industry. Ms. Jones Blackhurst serves as the Chairwoman of the Public Education Foundation. She also became Chief Executive-In-Residence of the UNLV International Gaming Institute, where she was a popular faculty member and key player in the “Expanding the Leaderverse” initiative. She became Executive Director of the UNLV Black Fire Leadership Initiative in January 2021. She has also served as a board member of World Choice Investment, LLC since April 2023 and is on the board of directors of Esports Entertainment Group, Inc. since March 2022. Since February 2021, Ms. Jones Blackhurst has served as a director of Gaming & Hospitality Acquisition Corp. Prior to joining CEC, Ms. Jones Blackhurst served two terms as Mayor of Las Vegas, from 1991 until 1999.
QUALIFICATIONS
QUALIFICATIONS Ms. Blackhurst brings to the Board significant experience in corporate social responsibility matters, specifically within the gaming industry, including policies on responsible gaming and government relations experience. Age: 84 Director Since: July 2020 (Director of ERI since September 2014) Committees: Nominating and Corporate Governance (Chair)
EXPERIENCE
EXPERIENCE Mr. Fahrenkopf has served on the Board since July 2020 and served on the board of ERI from September 2014 until July 2020. He served as President and Chief Executive Officer of the American Gaming Association (“AGA”), an organization that represents the commercial casino-entertainment industry by addressing federal legislation and regulatory issues, from July 1995 until June 2013. At the AGA, Mr. Fahrenkopf was the national advocate for the commercial casino industry and was responsible for positioning the AGA to address regulatory, political and educational issues affecting the gaming industry. Mr. Fahrenkopf is currently co-chairman of the Commission on Presidential Debates, which he founded and which conducts debates among presidential candidates. He serves as a board member of the International Republican Institute, which he founded. He also founded the National Endowment for Democracy, where he served as Vice Chairman and a board member from 1983 to 1992. Mr. Fahrenkopf served as chairman of the Republican National Committee from 1983 to 1989. Prior to his role at AGA, Mr. Fahrenkopf was a partner at Hogan & Hartson, where he regularly represented clients before the Nevada gaming regulatory authorities. Mr. Fahrenkopf served as the first Chairman of the American Bar Association Committee on Gaming Law and was a founding Trustee and President of the International Association of Gaming Attorneys. Mr. Fahrenkopf also sits on the board of directors of 12 NYSE-listed public investment companies: Gabelli Equity Trust, Inc. (GAB), Gabelli Utility Trust (GUT), Gabelli Global Multimedia Trust (GGT), Gabelli Dividend and Income Trust (GDV), Gabelli Gold and Natural Resources and Income Trust (GGN), Gabelli Small & Midcap Value Fund (GGZ), Bancroft Fund (BCV), Ellsworth Growth & Income Trust (ECF) and four additional investment companies within the Gabelli Innovations Trust. Mr. Fahrenkopf has been selected to serve as a director because of his extensive knowledge of gaming regulatory matters, his relevant legal experience and his experience as a public company director.
EXPERIENCE
| 8 | | 2024 PROXY STATEMENT |
EXPERIENCE
Age: 64 Director Since: April 2024 Committees: To Be Determined
EXPERIENCE
EXPERIENCE Ms. Harris Jones was elected to serve on the Board in April 2024. Ms. Harris Jones has served as Senior Vice President and Corporate Controller of Mondelez International from 2012 until she retired in 2015. Prior to that, she served as Senior Vice President and Corporate Controller at Kraft Foods Inc. from 2009 until 2012. Prior to her time at Kraft, Ms. Harris Jones had a 17-year career at Chrysler LLC, where her final role was Senior Vice President, Corporate Controller from 2008 to 2009. Before Chrysler, she spent six years at General Motors. Ms. Harris Jones also serves as a director of TrueBlue, Inc. (NYSE: TBI) since May 2016 where she serves as Chair of the Audit Committee, and serves as a member of the Corporate Governance and Nominating Committee and Innovation and Technology Committee, United Rentals, Inc. (NYSE: URI) since May 2018 where she serves as Chair of the Audit Committee and a member of the Compensation Committee and Fossil Group, Inc. (NASDAQ: FOSL) since October 2019 where she serves as a member of the Audit Committee and a member of the Nominating and Corporate Governance Committee.
QUALIFICATIONS
QUALIFICATIONS Ms. Harris Jones has been selected to serve as a director because of her extensive management, financial, and business experience at large, complex corporations and her service as a director on various public company boards. Age: 72 Director Since: July 2020 Committees: Compensation (Chair), Nominating and Corporate Governance, Corporate Social Responsibility
EXPERIENCE
EXPERIENCE Mr. Kornstein has served on the Board since July 2020 and is the Vice Chairman of the Board. He founded and has served as the managing member of the strategic, management and financial consulting firm Alpine Advisors LLC, an advisory firm engaged in the business of mergers and acquisitions and capital raising for companies and entrepreneurs. Mr. Kornstein served as Chairman of Caesars Entertainment U.K., Ltd. from November 2020 until its sale in July 2021. He was a director of CEC from October 2017 until the merger in July 2020, at which time he joined the board. During his tenure, Mr. Kornstein also served as Chairman of the Transaction Committee and the Strategy & Finance Committee. Mr. Kornstein served on the board of directors of Caesars Acquisition Company from January 2014 until its merger with CEC. He previously served as a non-executive Director on the Board of Gala Coral Group, Ltd., a diversified gaming company based in the United Kingdom, from June 2010 until its merger with Ladbrokes PLC in November 2016. He served as Chairman of the board of directors of Affinity Gaming, Inc., a casino gaming company, from March 2010 until January 2014, and Chief Restructuring Officer and Chairman of the board of directors of Bally Total Fitness Corporation. Mr. Kornstein has also served as a member of the boards of directors of Circuit City Stores, Inc., Cash Systems, Inc., Shuffle Master, Inc. and Varsity Brands, Inc. Mr. Kornstein served as Chief Executive Officer, President and Director of Jackpot Enterprises, Inc., which was a NYSE listed gaming company until its sale, and was an investment banker and Senior Managing Director of Bear, Stearns & Co. Inc. Mr. Kornstein brings to the Board his experience in the gaming and entertainment industries, experience as a chairman, president and chief executive officer, strategy and finance expertise and experience serving on several boards of directors.
EXPERIENCE
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EXPERIENCE
Age: 47 Director Since: July 2020 Committees: Compensation, Audit, Corporate Social Responsibility
EXPERIENCE
EXPERIENCE Mr. Mather has served on the Board since July 2020 and previously served as a director of CEC from March 2019 until the Merger in July 2020. Since January 2022, Mr. Mather has served as CEO and CIO of Vision One, an investment fund. Mr. Mather served as Portfolio Manager/Managing Director of Icahn Capital LP, from April 2014 to March 2020. Prior to joining Icahn Capital LP, Mr. Mather was at Goldman Sachs & Co. from 1998 to 2012, most recently as Managing Director responsible for Private Distressed Trading and Investing, where he focused on identifying and analyzing investment opportunities for both Goldman Sachs and clients. Mr. Mather has served as a director of Triumph Group since July 2023 and Newell Brands Inc. since March 2018. Mr. Mather was previously a director of: Cheniere Energy Inc. from May 2018 to February 2021; Conduent Inc. from December 2016 to February 2021; Herc Holdings Inc. from June 2016 to August 2019; Ferrous Resources Limited from June 2015 to July 2019; Freeport-McMoRan Inc. from October 2015 to March 2019; Federal-Mogul Holdings Corporation from May 2015 to January 2017; Viskase Companies Inc. from June 2015 to March 2016; American Railcar Industries Inc. from July 2014 to March 2016; CVR Refining LP from May 2014 to March 2016; and CVR Energy Inc. from May 2014 to March 2016. Mr. Mather holds the Chartered Alternative Investment Analyst, Chartered Financial Analyst, and Certified Financial Risk Manager professional designations.
QUALIFICATIONS
QUALIFICATIONS Mr. Mather brings to the Board his significant business and financial expertise and experience providing strategic advice and guidance to companies on matters such as risk management through his service as a director on various public company boards of directors. Age: 72 Director Since: July 2020 (Director of ERI since September 2014) Committees: Compensation
EXPERIENCE
EXPERIENCE Mr. Pegram has served on the Board since July 2020 and served on the board of ERI from September 2014 until July 2020. Mr. Pegram has been a partner in the Carson Valley Inn in Minden, Nevada since June 2009 and a partner in the Bodines Casino in Carson City, Nevada since January 2007. Mr. Pegram is the managing member of G PEG I, LLC, which owns and operates five casinos in the Reno and Carson City area. Mr. Pegram has more than 45 years of experience owning and operating 25 successful McDonald’s franchises through AMT Investments. Mr. Pegram is the former Chairman of the Thoroughbred Owners of California and has been the owner of a number of racehorses, including 1998 Kentucky Derby and Preakness Stakes winner, Real Quiet, 2010 Preakness Stakes winner, Lookin at Lucky, 1998 Breeders’ Cup Juvenile Fillies winner and 1999 Kentucky Oaks winner, Silverbulletday, 2001 Dubai World Cup winner, Captain Steve, and the 2007 and 2008 Breeders’ Cup Sprint winner, Midnight Lute. Additionally, Mr. Pegram served as a director of Skagit State Bancorp from April 1997 to November 2018. Mr. Pegram has been selected to serve as a director because of his extensive experience in the horse racing industry and as an investor, business owner, and director of various casino operations.
EXPERIENCE
| 10 | | 2024 PROXY STATEMENT |
EXPERIENCE
Age: 52 Director Since: July 2020 (Director of ERI since September 2014) Committees: None
EXPERIENCE
EXPERIENCE Mr. Reeg has served on our Board since July 2020 and served on the board of ERI from September 2014 until July 2020. Mr. Reeg served as Chief Financial Officer of ERI from March 2016 to May 2019 and became Chief Executive Officer in January 2019. Mr. Reeg served as President from September 2014 until December 31, 2018. Mr. Reeg served as a member of the board of managers of Eldorado Resorts LLC from December 2007 to September 2014, as Senior Vice President of Strategic Development for Eldorado Resorts LLC from January 2011 to September 2014 and a member of the executive committee of Silver Legacy (which is the governing body of Silver Legacy) from August 2011 through August 2014. Mr. Reeg is a Vice President and a member the board of directors of REI., a less than 5% shareholder of the Company and a partial owner of G PEG I, LLC, which owns and operates five casinos in the Reno and Carson City area. Mr. Reeg was a member of the board of managers of NGA HoldCo, LLC, which was a shareholder of ours, from 2007 through 2011 and served on the board of directors of Autocam Corporation from 2007 to 2010. From 2002 to 2005, Mr. Reeg was a Managing Director and portfolio manager at AIG Global Investment Group (“AIG”), where he was responsible for co-management of the high-yield mutual fund portfolios. Prior to his role at AIG, Mr. Reeg was a senior high-yield research analyst covering various sectors, including the casino, lodging and leisure sectors, at Bank One Capital Markets.
QUALIFICATIONS
QUALIFICATIONS Mr. Reeg has been selected to serve as a director because of his extensive financial experience and his familiarity with the business of the Company. Age: 72 Director Since: July 2020 (Director of ERI since September 2014) Committees: Audit (Chair), Nominating and Corporate Governance
EXPERIENCE
EXPERIENCE Mr. Tomick is our Lead Independent Director and has served on the Board since July 2020 and served on the board of ERI from September 2014 until July 2020. Mr. Tomick co-founded Securus, Inc., a company involved in the GPS monitoring and Personal Emergency Response business, and served as its Chief Financial Officer from 2008 to 2010 and as its Chairman from 2010 to March 2015. From 1997 to 2004, Mr. Tomick was Executive Vice President and Chief Financial Officer of SpectraSite, Inc., a NYSE-listed wireless tower company. Mr. Tomick was, from 1994 to 1997, the Chief Financial Officer of Masada Security, a company involved in the security monitoring business and, from 1988 to 1994, the Vice President-Finance of Falcon Cable TV, where he was responsible for debt management, mergers and acquisitions, equity origination and investor relations. Prior to 1988, he managed a team of corporate finance professionals focusing on the communications industry for The First National Bank of Chicago. Mr. Tomick currently serves on the board of directors of Casalu, Inc. since October 2020, Gryppers, Inc., since July 2016, Autocam Medical since 2008 and First Choice Packaging since 2006 and has served on the board of the following organizations: Autocam Corporation (2008-2014), NuLink Digital (2010-2016) and TransLoc, Inc.(2005-2016). Mr. Tomick has been selected to serve as a director because of his financial and management expertise and his experience with respect to raising capital, mergers and acquisitions, corporate governance and investor relations.
EXPERIENCE
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SELECTION OF DIRECTORS
SELECTION OF DIRECTORS
CORPORATE GOVERNANCE GUIDELINES
| • | Director compensation; |
50% of CEO and NEO Equity Compensation is Performance-Based
50% of CEO and NEO Equity Compensation is Performance-Based 50% of the 2023 annual target long-term incentive equity grant was in the form of performance-based stock units (“PSUs”) for our CEO and other NEOs. The 2023 long-term incentive PSUs are based 65% on total shareholder return (“TSR”) goals, compared to the S&P 500 (“rTSR”), and 35% based on Adjusted EBITDA goals, both measured over a three-year performance period. Beginning with the 2024 long-term incentive PSUs, 80% will be based on TSR goals compared to the S&P 500 and only 20% will be based on Adjusted EBITDA goals in order to address shareholder feedback by decreasing the magnitude of the overlapping metrics between the short-term incentive (“STI”) and long-term incentive (“LTI”) programs. The threshold levels of performance that must be met before any PSUs are earned are rigorous and challenging. The other 50% of our CEO’s and other NEOs’ long-term incentive grants was in the form of time-based restricted stock units (“RSUs”), which vest ratably over three years subject to continued employment.
50% of CEO and NEO Equity Compensation is Performance-Based
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50% of CEO and NEO Equity Compensation is Performance-Based
Performance-based compensation is also subject to the Company’s clawback policy, which requires the Company to recoup amounts of excess incentive compensation in certain situations, including in the event that the Company is required to prepare a restatement to correct the Company’s material noncompliance with any financial reporting requirement under securities laws, and restatements that correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The proportion of total compensation that was variable and “at-risk” and the performance-based metrics further enhanced the link between pay and performance for the CEO and NEOs and strengthened the alignment of the interests of the executive officers with those of our shareholders.
50% of CEO and NEO Equity Compensation is Performance-Based
| Majority of CEO and NEO Total Target Compensation is At-Risk Approximately 87% of our CEO’s and approximately 79% of our other NEOs’ 2023 annual total target compensation was variable and “at-risk”. These proportions enhance the strong link between pay and performance for our CEO and other NEOs and the alignment of interests with those of the Company and its shareholders. A significant portion of our NEOs’ compensation is “at-risk”, meaning the NEOs’ right to receive such payment, and the amount of such payment, depends on either the achievement of corporate objectives or stock price performance and continued employment. Our targeted pay mix (fixed salary vs. variable pay) reflects a combination of competitive market conditions and strategic business needs. This variable pay is considered “at-risk” compensation. The target total compensation opportunities based on 2023 compensation levels that were considered “at-risk” are shown below (percentages in the following chart may not add due to rounding): |
50% of CEO and NEO Equity Compensation is Performance-Based
| (1) Performance-based compensation (in the form of annual bonus and PSUs) as a percentage of target total compensation for the CEO and other NEOs are approximately 57% and 52%, respectively. |
50% of CEO and NEO Equity Compensation is Performance-Based
| 30 | | 2024 PROXY STATEMENT |
Response to Say-on-Pay Advisory Vote and Shareholder Engagement
| What we heard | How we responded | | One-time off-cycle equity and cash awards are disfavored (especially after such an award was granted to the CEO two years previously) | The Compensation Committee commits to limiting any one-time discretionary grants or cash awards only to special circumstances and with robust disclosure of the Company’s rationale for making any such award. No off-cycle awards were granted to executive officers for 2023. | | Consider reducing overlapping metrics in short-term and long-term incentive programs | The Compensation Committee considered numerous financial metrics for the PSU program. Adjusted EBITDA was approved because it is our primary determinant of long-term shareholder success. The Compensation Committee considered the overlap of Adjusted EBITDA in the STI and LTI programs, but ultimately decided that consistent Adjusted EBITDA performance is the strongest link to our investors. However, in light of shareholder concern, the Compensation Committee decided to reduce the Adjusted EBITDA metric’s portion of the LTI program (beginning with the January 2024 PSU grants), from 35% to 20%, thereby reducing overlap. Annually, the Compensation Committee will rigorously review and approve financial targets to ensure consistent enhancement of financial performance and shareholder value. | | For PSU grants, consider the appropriateness of a full three-year performance period, as opposed to the average of three single years | The 2024 PSU grant is based 80% on our three-year rTSR performance vs. the S&P 500, and 20% is based on the three-year average performance of one-year Adjusted EBITDA goals. For the 80% portion based on rTSR performance, we are maintaining the three-year performance period. For the 20% portion based on the three-year average performance of one-year Adjusted EBITDA goals, the Compensation Committee considered numerous factors including shareholder feedback in reviewing alternative approaches. However, in light of the post-COVID challenges in the gaming industry to forecast longer-term (e.g., three year) financial performance, the Compensation Committee approved the average of three successive one-year periods because the structure allows realistic performance targets to be set when management and the Compensation Committee have the most current financial information, and the approach has strong shareholder alignment with the inclusion of the most realistic Adjusted EBITDA targets. |
Response to Say-on-Pay Advisory Vote and Shareholder Engagement
| What we heard | How we responded | | Relative TSR grants target median performance (target payout is based on performance in the 50th percentile) | In the interests of continuous improvement, annually the Compensation Committee will review market practices for relative TSR program design at our peers. The Compensation Committee considered numerous factors including shareholder feedback in reviewing alternative rTSR design approaches. After thorough review, the Compensation Committee determined that the current design is appropriate, reasonable, and sufficiently demanding given the Company’s current rTSR positioning, which resulted in a below target payout for the rTSR portion of the 2020 Transformational Grant and no payout for the rTSR portion of the 2021 PSU grant ending December 2023. | | CEO base salary and thus annual and long-term incentive awards are above the peer median | In 2023, our independent compensation consultant performed a total compensation study with our peer companies. Our CEO’s 2023 target total compensation opportunity, including base salary and annual and LTI awards is at approximately the 50th percentile vs. our compensation peers identified later in this CD&A. In light of such positioning, the Compensation Committee determined that our CEO’s target total compensation opportunity was appropriate. |
OUR COMPENSATION PHILOSOPHY
| • | enhance shareholder value by focusing our executives’ efforts on the specific performance metrics that drive enterprise value; |
OUR COMPENSATION PHILOSOPHY
| • | attract, motivate, and retain highly-qualified executives committed to our long-term success; |
OUR COMPENSATION PHILOSOPHY
| • | assure that our executives receive reasonable compensation opportunities, relative to their peers at similar companies, and actual compensation payouts are aligned with our performance; and |
IMPLEMENTING THE PHILOSOPHY
| WHAT WE DO Maintain robust stock ownership guidelines for NEOs and directors Set maximum payout limit on our annual incentive plan and LTI plan awards Maintain a policy for recovery of erroneously awarded compensation (clawback policy) Retain an independent compensation consultant reporting directly to the Compensation Committee Enforce strict insider trading and anti-hedging policies Incorporate double-trigger (rather than single trigger) change in control provisions Require that, in the event of certain terminations (as defined below), prior to January 1, 2025, executive officers will be required to repay to the Company a pro rata portion of his or her one-time signing bonus paid in December 2021 Maintain a Compensation Committee that is comprised solely of independent directors Provide that the majority of our executive officers’ compensation is granted in the form of long-term equity awards, which we believe aligns their interests with those of our shareholders | WHAT WE DON’T DO No change-in-control severance multiple in excess of 2.99x annual base salary and target annual bonus We do not provide excise tax gross-ups for any officer We do not provide extensive executive perquisites No enhanced retirement formulas No minimum levels of compensation guaranteed No payment of dividend or dividend equivalents on unvested stock or unearned performance units No repricing underwater options without shareholder approval |
Role of the Compensation Committee
| • | reviewing and assessing competitive market data from the Compensation Committee’s independent compensation consultant; |
Role of the Compensation Committee
| • | approving any changes to the total compensation package, including, but not limited to, base salary, annual incentives, long-term incentive award opportunities and payouts, and retention programs; |
Role of the Compensation Committee
| • | selecting or receiving advice from compensation consultants, legal counsel or other advisors; and |
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee retained Aon for executive compensation advisory services, namely, to conduct its annual total compensation study for executive and key manager positions. Aon reports directly to the Compensation Committee and the Compensation Committee directly oversees the work performed by, and determines the fees paid to, Aon in connection with the services it provides to the Compensation Committee. The Compensation Committee instructs Aon to give advice to the Compensation Committee independent of management and to provide such advice for our benefit and for the benefit of our shareholders. With the Compensation Committee’s approval, Aon may work directly with management on certain executive compensation matters. During 2023, Aon was engaged by the Company’s management to provide additional services related to risk analysis, insurance coverage, healthcare and ESG services and received fees for such services of approximately $9.1 million (approximately 0.07% of Aon’s 2023 revenue). Also in 2023, Aon’s professional fees for assisting the Board with executive compensation issues for the NEOs was approximately $119,000 (approximately 0.0009% of Aon’s 2023 revenue). The Compensation Committee reviews the independence of its compensation consultant on an annual basis, taking into account a number of factors, including the six factors articulated in the Nasdaq listing standards and applicable SEC guidance, and also considered the additional services provided by Aon as described above. For 2023, the Compensation Committee determined that Aon was independent and its services to the Compensation Committee did not raise any conflicts of interest among the Compensation Committee or our management. Specific roles of Aon include, but are not limited to, the following:
Role of the Independent Compensation Consultant
| • | identifying and advising the Compensation Committee on executive compensation trends and regulatory developments; |
Role of the Independent Compensation Consultant
| • | providing a total compensation study for executives against peer companies and recommendations for NEO pay; |
Role of the Independent Compensation Consultant
| • | providing advice to the Compensation Committee on governance best practices as well as any other areas of concern or risk; |
Role of the Independent Compensation Consultant
| • | assisting with the development of a compensation peer group for annual executive compensation study; |
Role of the Independent Compensation Consultant
| • | serving as a resource to the Compensation Committee Chair for meeting agendas and supporting materials in advance of each meeting; and |
Role of the Independent Compensation Consultant
| • | advising the Compensation Committee on management’s pay recommendations. |
Peer Companies
Peer Companies The Compensation Committee believes that obtaining relevant market data where the Company competes for talent is very important to making determinations about executive compensation. Annually, the Compensation Committee reviews total compensation market data provided by Aon. The Compensation Committee reviews and approves the peer group used for comparisons prior to commencement
Peer Companies
| 34 | | 2024 PROXY STATEMENT |
Peer Companies
of the pay study. Consistent with prior years, the following peer group development criteria were used to develop a group of peer companies to assist with fiscal year 2023 pay decisions:
Peer Companies
| • | Industry: Companies from the gaming, hospitality, hotel and leisure industries based on the Global Industry Classification System. |
Peer Companies
| • | Company size: Approximately 0.4x to 3x our annual revenues, with a secondary focus on market capitalization at the time of the assessment. |
Peer Companies
| • | Peers: Companies using Caesars as a peer in their compensation peer group. |
Peer Companies
| • | Peers of peers: Companies used by potential peers in their peer groups. |
Peer Companies
| • | Competitors: Companies that compete with Caesars for business and management talent. |
Peer Companies
| • | Management and Board recommendations. |
Peer Companies
The peer group used as a reference point to assist the Compensation Committee with 2023 compensation decisions was unchanged from the prior year and is set forth below:
Peer Companies
| Boyd Gaming Corporation Carnival Corporation Hilton Worldwide Holdings Hyatt Hotels Corporation | Las Vegas Sands Marriott International MGM Resorts International Norwegian Cruise Line Holdings | Penn Entertainment, Inc. Royal Caribbean Cruises Wynn Resorts |
Peer Companies
Exceptions to the primary criteria used for peer group may be applied, to the extent determined appropriate. The Compensation Committee uses competitive compensation data from the annual total compensation study of peer companies as a reference point to make informed decisions about targeted total compensation opportunities and specific compensation elements. The Compensation Committee does not benchmark total compensation to any specific percentile relative to the peer companies or the broader United States market, but is fully informed of the competitive landscape. The Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as Company, business and individual performance, scope of responsibility, critical needs and skill sets, leadership potential and succession planning.
Realizable Pay Demonstrates Pay for Performance Alignment
The following chart demonstrates the relationship between the target and realizable pay values, in each of the past three years, of our CEO’s annual incentive cash bonus and equity grants, including annual RSU and PSU grants, as well as Mr. Reeg’s 2022 performance-based one-time hurdle award. The target grant values shown in the table above reflect the target level awards approved by the Compensation Committee for determining the number of RSUs and PSUs granted to our CEO, which differs from the values we are required to report in the Summary Compensation Table. Mr. Reeg’s one-time hurdle award granted in 2022 is based on the grant date fair value of the award as no target value was used in determining such award. Realizable value shown for the long-term incentive equity awards reflects (1) the actual value of all RSUs and PSUs that have vested, based on the stock price on the vesting date as applicable, (2) shares for each unearned PSUs based on the achievement of applicable performance metrics as of April 1, 2024, multiplied by the then closing price of $43.17, (3) the one-time hurdle award granted in 2022 consisting of three stock-price hurdles based on the number of shares that would be received if the performance period concluded on April 1, 2024, at a closing price of $43.17, if any, multiplied by the then closing stock price, and (4) the number of unvested RSUs multiplied by our closing stock price of $43.17 as of April 1, 2024. The realizable value shown for the annual incentive cash bonus reflects the actual bonus earned based on company performance for the applicable year. Because the change in share price is a key component of the equity value, the realizable equity value represented substantially less than the target value, demonstrating the direct link between performance and pay outcomes.
OVERVIEW
| • | Our annual bonus programs are designed to provide incentive compensation based on our financial performance. |
OVERVIEW
| • | Long-term equity incentives are tied to our sustained long-term financial performance and enhancement of total shareholder value. |
BASE SALARY
BASE SALARY The Compensation Committee believes that base salary levels should recognize the skill, competency, experience and performance an executive brings to his or her position. The Compensation Committee determines base salaries using both competitive market data from Aon’s competitive assessment using the peer group and a comprehensive assessment of relevant factors such as experience level, value to shareholders, responsibilities, future leadership potential, critical skills, individual contributions and performance, economic conditions, and the market demands for similar talent. As previously described, the Compensation Committee performs an annual review of the total compensation provided to our executive officers as compared to our selected peer groups. Based on the analysis performed, applying judgement and discretion, the Compensation Committee determined that the 2023 base salaries of the executive officers would remain unchanged from 2022 base salaries. The NEOs’ base salary levels are set forth in the table below.
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN) The goals under our annual incentive plan are designed to be straight-forward in order to focus participants on clearly measurable metrics, balance corporate and property performance by individual participants, and implement the appropriate level of reward potential. Annual incentive awards have historically been based on the achievement of Adjusted EBITDA targets (as defined below). Performance targets are set by the Compensation Committee annually at the start of the applicable fiscal year. Adjusted EBITDA was established as the primary performance metric for 2023 because the Compensation Committee believed that it most accurately reflects our results of operations and represents a key performance metric in the gaming/casino industry. Consistent with the Compensation Committee’s evaluation of the executive officers base salary described above, the Compensation Committee determined that the 2023 target bonus opportunities, as a percentage of base salary, of the executive officers would remain unchanged from the 2022 target bonus opportunities.
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
| | | 37 |
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
The Compensation Committee approved the following target bonus opportunities for the 2023 calendar year:
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
| EXECUTIVE NAME | 2023 TARGET OPPORTUNITY (AS A % OF BASE SALARY) | 2022 TARGET OPPORTUNITY (AS A % OF BASE SALARY) | % Change | | Thomas R. Reeg | 200% | 200% | No Change | | Bret Yunker | 125% | 125% | No Change | | Anthony L. Carano | 125% | 125% | No Change | | Edmund L. Quatmann, Jr. | 100% | 100% | No Change | | Stephanie Lepori | 100% | 100% | No Change |
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
With respect to the Adjusted EBITDA financial metric, performance levels for threshold and maximum bonus opportunities were also established at the beginning of 2023 as they are based on a percentage of the approved target opportunity. The following table sets forth the threshold, target, and maximum levels established under the 2023 annual incentive plan at the beginning of 2023, based on the budget for 2023, and the levels actually achieved based on performance:
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
| PERFORMANCE LEVEL | PERFORMANCE REQUIREMENT | CONSOLIDATED ADJUSTED EBITDA (‘000’S) | PAYOUT PERCENTAGE OF TARGET | | Threshold | 90% of target goal | $3,558,600 | 50.0% | | Target | 100% of target goal | $3,954,000 | 100.0% | | Maximum | 115% of target goal | $4,547,100 | 200.0% | | Actual for 2023 * | 100.4% of target goal | $3,972,000 | 102.8% |
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
| * See below for a discussion of the adjustments to Adjusted EBITDA for compensation purposes which differ from the Adjusted EBITDA as reported on our Form 10-K. |
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
| EXECUTIVE NAME | ANNUAL BONUS EARNED FOR 2023 | ANNUAL BONUS EARNED FOR 2023 AS % OF TARGET | | Thomas R. Reeg | $4,112,000 | 102.8% | | Bret Yunker | $1,477,750 | 102.8% | | Anthony L. Carano | $1,734,750 | 102.8% | | Edmund L. Quatmann, Jr. | $796,700 | 102.8% | | Stephanie Lepori | $719,600 | 102.8% |
ANNUAL INCENTIVES (CASH-BASED BONUS PLAN)
Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Net Income (Loss) to Adjusted EBITDA, see the section entitled “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Year Ended December 31, 2023” on pages 47-48 of our 2023 Annual Report on Form 10-K. For purposes of determining targets for bonus opportunities and achievement of such targets for 2023, consolidated Adjusted EBITDA was calculated as described in our Form 10-K for the year ended December 31, 2023, as further adjusted by the Compensation Committee in its authority to exclude rent paid under our Rio All-Suite Hotel and Casino lease during the 2023 fiscal year, prior to its previously contemplated divestiture which occurred in October 2023.
LONG-TERM INCENTIVES (EQUITY-BASED AWARDS)
LONG-TERM INCENTIVES (EQUITY-BASED AWARDS) Our 2015 Equity Incentive Plan allows us to grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock-based awards, and performance awards.
LONG-TERM INCENTIVES (EQUITY-BASED AWARDS)
| 38 | | 2024 PROXY STATEMENT |
2023 Equity Mix
2023 Equity Mix As in past years, for LTI awards made to executive officers during 2023, the equity compensation mix was 50% RSUs and 50% PSUs (based on dollar-denominated values). For 2023, 65% were based on a three-year rTSR against the S&P 500 and 35% of the PSUs were based on Adjusted EBITDA achievement over three years (based on dollar-denominated values). Based on a thorough review of Aon’s independent market data described above, the Compensation Committee established annual target LTI levels which were used to determine the target grant date value of LTI awards made to executive officers during 2023. Consistent with the Compensation Committee’s evaluation of each executive officer’s base salary and annual incentive compensation described above, the Compensation Committee determined that each NEO’s target grant date LTI award opportunity for 2023 (as a percentage of base salary) would remain unchanged from the 2022 LTI award opportunity as set forth in the table below:
2023 Equity Mix
| EXECUTIVE NAME | 2023 LTI AWARD TARGET OPPORTUNITY (AS A % OF BASE SALARY) | 2022 LTI AWARD TARGET OPPORTUNITY (AS A % OF BASE SALARY) | % Change | | Thomas R. Reeg | 450% | 450% | No Change | | Bret Yunker | 300% | 300% | No Change | | Anthony L. Carano | 300% | 300% | No Change | | Edmund L. Quatmann, Jr. | 200% | 200% | No Change | | Stephanie Lepori | 200% | 200% | No Change |
2023 Equity Mix
For Mr. Reeg, his 2022 LTI Award target opportunity shown above does not include his special one-time MSU grant made during 2022, which was 100% performance-based.
Relative Total Shareholder Return (“rTSR”)
| • | 75th percentile TSR ranking and above: 200% of target payout |
Relative Total Shareholder Return (“rTSR”)
| • | 50th percentile TSR ranking: 100% of target payout |
Relative Total Shareholder Return (“rTSR”)
| • | 35th percentile TSR ranking: 50% of target payout |
Relative Total Shareholder Return (“rTSR”)
| • | Below 35th percentile: No payout |
Relative Total Shareholder Return (“rTSR”)
| • | Payouts for performance between threshold, target, and maximum percentile requirements are interpolated on a straight-line basis. |
Relative Total Shareholder Return (“rTSR”)
| • | If our 3-year TSR is negative, then the final payout level for these awards will be capped at “target”, even if our TSR falls above the 50th percentile of the TSR ranking against the peer group. For example, if our 3-year TSR is negative, but our TSR ranking was attained at the 75th percentile, the final award payout level would be 100% of target, not 200%. |
Adjusted EBITDA
Adjusted EBITDA The portion of the 2023 annual LTI awards that is based on Adjusted EBITDA (which has the same definition as that used for our annual incentive plan) is intended to motivate our senior management team to achieve operational performance that is aligned to top-line operating metrics. The Board and management view Adjusted EBITDA as a critical indicator of Company performance given the nature of our business, which is why the Compensation Committee determined it was appropriate to include Adjusted EBITDA as a performance metric in both the 2023 annual incentive plan and the 2023 LTI programs. Adjusted EBITDA is a useful indicator of cash flow from operations, which continues to be of importance to our business. It also focuses executive officers on the Company’s most critical strategic priority of profitability, and aligns their incentives, both short and long term, with the goal of generating a measure of income, a key driver of valuation. For each calendar year ended or ending December 31st of 2023, 2024 and 2025 (each, a “Performance Year”), the Compensation Committee has established, or will establish, a “target” level of Adjusted EBITDA to be achieved for such Performance Year (each, a “Performance Year Target”). The percentage at which each Performance Year Target has been achieved will be averaged following the end of the full three-year performance period in order to calculate the cumulative percentage of achievement of the overall Adjusted EBITDA goal (the “Cumulative Percentage”). The average of three successive one-year periods is applied because the structure allows the most realistic Adjusted EBITDA performance targets to be set by management and the Compensation Committee with consideration of the most current financial information providing strong shareholder alignment. Based on the payout percentage (the “Payout Percentage”) applicable to the Cumulative Percentage, a number of PSUs as a percentage of the target number of PSUs granted in respect of the Adjusted EBITDA metric (the “EBITDA Target Award”) will remain eligible to vest subject to continued employment at the end of the total three-year performance period. The Adjusted EBITDA performance goal and actual achievement is disclosed annually in our CD&A. Please reference “Annual Incentives (Cash-Based Bonus Plan)” on page 37 for the fiscal year 2023 Adjusted EBITDA performance goals and actual achievement. The payout slopes for this portion of the 2023 LTI awards are the same as the payout slopes established for the 2023 annual incentive plan (i.e., 90% achievement results in 50% payout, 100% achievement results in 100% payout and 115% achievement and above results in 200% payout).
Adjusted EBITDA
| • | If the Cumulative Percentage is less than 90%, then the Payout Percentage related to the EBITDA Target Award will be 0%. |
Adjusted EBITDA
| • | Straight-line interpolation will be used to determine the Payout Percentage for any Cumulative Percentage between 90% and 100% and between 100% and 115%, based upon the Payout Percentages set forth above. |
Adjusted EBITDA
| EXECUTIVE NAME | TARGET AS A % OF SALARY | RSU* TARGET GRANT VALUE | PSU* TARGET GRANT VALUE | | Thomas R. Reeg | 450% | $4,500,000 | $4,500,000 | | Bret Yunker | 300% | $1,725,000 | $1,725,000 | | Anthony L. Carano | 300% | $2,025,000 | $2,025,000 | | Edmund L. Quatmann, Jr. | 200% | $775,000 | $775,000 | | Stephanie Lepori | 200% | $700,000 | $700,000 |
Achievement of 2021 PSU Grants
Achievement of 2021 PSU Grants The LTI grants made to executive officers during 2021 were 50% time-based RSUs vesting ratably over three years and 50% PSUs (based on dollar-denominated values). For 2021, 35% of the dollar-denominated values of the PSUs were based on our annual Adjusted EBITDA achievement for 2021, 2022 and 2023, and 65% were based on the Company’s three-year relative TSR ranking against the S&P 400 Midcaps, measured over a three-year period ending December 31, 2023. The 2021 PSU grant achieved an overall payout of 48.0% of the targeted number of awards as detailed below. 2021 Adjusted EBITDA PSU At the end of the three-year performance period, the Compensation Committee determined that a payout of 137.2% of the target award was appropriate based on the annual Adjusted EBITDA performances against budget of 102.8%, 110.0%, and 200.0% for the years ended December 31, 2023, 2022 and 2021, respectively. These Adjusted EBITDA PSUs vested on January 29, 2024. 2021 rTSR PSU At the end of the three-year performance period, it was determined that the ending average stock price over the 20-day trading period prior to December 31, 2023, of $46.22 ranked in the 12th percentile, which did not meet the threshold of the 35th percentile. These rTSR PSUs were not earned, resulting in zero payout.
Achievement of 2020 Transformation Equity Grants to NEOs
Achievement of 2020 Transformation Equity Grants to NEOs In connection with the consummation of the merger in July 2020, the Compensation Committee approved PSU grants to Messrs. Reeg, Yunker, Anthony L. Carano, and Quatmann based on the Company’s relative TSR against the S&P 400 Midcaps, scheduled to cliff vest at the end of the performance period of July 20, 2020 (the closing date of the merger) through July 19, 2023 (the “2020 Transformation Award”). Ms. Lepori was not an NEO at the time of the Compensation Committee’s approval and did not receive a performance-based 2020 Transformation Award. Instead, Ms. Lepori received a time-based RSU award that had a cliff vest tied to the three-year period following the closing date of the merger. At the end of the 2020 Transformation Award’s performance period, it was determined that the ending average stock price over the 20-day trading period prior to July 19, 2023, of $50.48 ranked in the 38th percentile, resulting in a 60% payout of the target number of awards initially granted.
EQUITY GRANT PRACTICES
EQUITY GRANT PRACTICES The Compensation Committee’s procedure for timing of equity awards helps to provide assurance that grants are not timed to result in favorable pricing for executives. Generally, equity awards are granted by the Compensation Committee as a dollar value from which the number of shares awarded is determined based on the prior 20-day average stock price. Board and committee meeting schedules and award decisions are made without regard to the timing of our SEC filings or press releases. The Compensation Committee approves equity awards during “open window” periods (i.e., does not approve awards at a time when either the Company or the executive(s) are in possession of material non-public information).
Summary Compensation Table
Summary Compensation Table The following table summarizes the total compensation paid to or earned by each of our NEOs for the fiscal years ended December 31, 2023, 2022 and 2021.
Summary Compensation Table
| NAME AND PRINCIPAL POSITION | YEAR | SALARY ($) | BONUS(1) ($) | STOCK AWARDS(2) ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION(3) ($) | ALL OTHER COMPENSATION(4) ($) | TOTAL ($) | | Thomas R. Reeg Chief Executive Officer | 2023 | 2,000,000 | — | 12,161,765 | 4,112,000 | 336,594 | 18,610,359 | | | 2022 | 2,000,000 | — | 24,616,624 | 4,400,000 | 333,296 | 31,349,920 | | | 2021 | 2,000,000 | 5,000,000 | 7,391,597 | 8,000,000 | 205,654 | 22,597,251 | | Bret Yunker Chief Financial Officer | 2023 | 1,150,000 | — | 4,661,992 | 1,477,750 | 50,155 | 7,339,897 | | | 2022 | 1,150,000 | 244,375 | 3,425,776 | 1,581,250 | 35,629 | 6,437,030 | | | 2021 | 1,000,000 | 1,500,000 | 2,111,760 | 2,500,000 | 25,571 | 7,137,331 | | Anthony L. Carano President and Chief Operating Officer | 2023 | 1,350,000 | — | 5,472,813 | 1,734,750 | 63,735 | 8,621,298 | | | 2022 | 1,350,000 | 286,875 | 4,021,635 | 1,856,250 | 38,906 | 7,553,666 | | | 2021 | 1,300,000 | 1,500,000 | 2,745,368 | 3,250,000 | 85,693 | 8,881,061 | | Edmund L. Quatmann, Jr. Chief Legal Officer | 2023 | 775,000 | — | 2,094,492 | 796,700 | 110,003 | 3,776,195 | | | 2022 | 775,000 | 131,750 | 1,539,047 | 852,500 | 60,951 | 3,359,248 | | | 2021 | 750,000 | 1,000,000 | 1,187,837 | 1,500,000 | 17,353 | 4,455,190 | | Stephanie Lepori Chief Administrative and Accounting Officer | 2023 | 700,000 | — | 1,891,766 | 719,600 | 16,001 | 3,327,367 | | | 2022 | 700,000 | 119,000 | 1,390,108 | 770,000 | 15,158 | 2,994,266 | | | 2021 | 650,000 | 1,000,000 | 686,238 | 780,000 | 15,253 | 3,131,491 |
Summary Compensation Table
| (1) Amounts shown for 2022 represent the incremental performance bonus awarded as a result of the efforts, leadership, and performance in response to the continued impact of COVID-19 on the Company’s operations in early 2022. Amounts in 2021 represent one-time cash signing bonuses in conjunction with the execution of new employment agreements. |
Summary Compensation Table
| (2) Amounts shown represent the aggregate grant date fair value of RSUs and PSUs computed in accordance with Accounting Standards Codification 718. For a discussion of valuation assumptions, see Note 15 in our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC on February 20, 2024. Key assumptions used in the Monte Carlo simulation for determining the grant date fair value of the 2023 relative TSR PSUs included: (i) the expected term and remaining performance period of 2.93 years; (ii) a risk-free rate of 3.88% derived from two and three year continuously compounded semi-annual zero-coupon U.S. Treasury rates, interpolated to determine a 2.93 year maturity; (iii) a dividend yield of 0%; and (iv) an expected volatility of 91.23% based on the historical volatility of the Company and each member of the S&P 500 Index over the prior 2.93 years. At the grant date, we believed that it was probable that the performance criteria applicable to the non-market-based PSUs would be met at target level and that each individual will remain employed through the vesting period. For the market-based PSUs (i.e., the PSUs based on rTSR and Mr. Reeg’s hurdle award granted during 2022), the probable outcome of achievement of the market-based TSR goals / applicable stock price hurdles was determined using a Monte Carlo simulation model. For both the market-based and non-market based PSUs (other than Mr. Reeg’s hurdle award), the maximum number of PSUs eligible to vest is equal to 200% of the target award. Assuming maximum level of achievement of the PSUs with non-market-based performance conditions granted during 2023, the grant date fair value of the awards granted to Messrs. Reeg, Yunker and Anthony L. Carano, Mr. Quatmann and Ms. Lepori would have been $3,582,014, $1,373,038, $1,611,922, $616,866 and $557,118, respectively. The hurdle award granted to Mr. Reeg in 2022 are only eligible to vest up to 100% of the awards granted. |
Summary Compensation Table
| (3) Amounts shown for 2023, 2022 and 2021 represent the amounts earned under our annual bonus plan in respect of performance achieved during the applicable year. |
Summary Compensation Table
| 44 | | 2024 PROXY STATEMENT |
Summary Compensation Table
| (4) All other compensation for 2023 consisted of the following: |
Summary Compensation Table
| NAME | LIFE INSURANCE PREMIUMS ($) | LONG- TERM DISABILITY ($) | GROUP TERM LIFE INSURANCE ($) | USE OF CORPORATE OR LEASED AIRCRAFT ($)(a) | 401(K) MATCH ($) | HEALTH SAVINGS ACCOUNT ($) | TOTAL ($) | | Thomas R. Reeg | 2,352 | 1,479 | 5,382 | 320,400 | 6,981 | — | 336,594 | | Bret Yunker | 2,352 | 1,479 | 3,510 | 36,064 | 6,750 | — | 50,155 | | Anthony L. Carano | 2,352 | 1,479 | 2,340 | 57,564 | — | — | 63,735 | | Edmund L. Quatmann, Jr. | 1,823 | 1,479 | 4,140 | 92,161 | 9,900 | 500 | 110,003 | | Stephanie Lepori | 1,646 | 1,479 | 3,726 | — | 9,150 | — | 16,001 |
Summary Compensation Table
| (a) The amounts disclosed reflect the aggregate incremental cost to the Company of providing certain personal use of Company-owned or leased aircraft. For leased aircraft, this cost is calculated based on the applicable hourly rate charged to the Company, plus fuel and ancillary charges. The cost of Company-owned aircraft is calculated based on an estimate of the aggregate incremental cost to the Company, consisting of the cost to the Company of fuel, trip-related maintenance, crew travel expenses, on-board catering, landing fees, trip-related hangar/parking costs and other miscellaneous variable costs. Since our aircraft is used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as pilots’ salaries, depreciation of the purchase costs of our aircraft and the cost of maintenance not specifically related to trips. From time to time, certain family members or other guests will accompany the NEOs on personal trips when using Company-owned aircraft, at a nominal or at no incremental cost to the Company. |
Summary Compensation Table
| | | 45 |
Summary Compensation Table
Grants of Plan-Based Awards Table The following table sets forth information regarding the grant of plan-based awards made during 2023 to the NEOs.
Summary Compensation Table
| | | ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | | ESTIMATED POSSIBLE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (#) | GRANT DATE FAIR VALUE OF STOCK AWARDS(2) ($) | | NAME | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | | | | Thomas R. Reeg | | | | | | | | | | | Annual Incentive Plan | 1/1/2023 | 2,000,000 | 4,000,000 | 8,000,000 | — | — | — | — | — | | Time-based | 1/27/2023 | — | — | — | — | — | — | 97,638 | 5,117,208 | | Performance-based Adjusted EBITDA | 1/27/2023 | — | — | — | 17,087 | 34,173 | 68,346 | — | 1,791,007 | | Performance-based rTSR | 1/27/2023 | — | — | — | 31,732 | 63,464 | 126,928 | — | 5,253,550 | | Bret Yunker | | | | | | | | | | | Annual Incentive Plan | 1/1/2023 | 718,750 | 1,437,500 | 2,875,000 | — | — | — | — | — | | Time-based | 1/27/2023 | — | — | — | — | — | — | 37,428 | 1,961,601 | | Performance-based Adjusted EBITDA | 1/27/2023 | — | — | — | 6,550 | 13,099 | 26,198 | — | 686,519 | | Performance-based rTSR | 1/27/2023 | — | — | — | 12,164 | 24,328 | 48,656 | — | 2,013,872 | | Anthony L. Carano | | | | | | | | | | | Annual Incentive Plan | 1/1/2023 | 843,750 | 1,687,500 | 3,375,000 | — | — | — | — | — | | Time-based | 1/27/2023 | — | — | — | — | — | — | 43,937 | 2,302,738 | | Performance-based Adjusted EBITDA | 1/27/2023 | — | — | — | 7,689 | 15,378 | 30,756 | — | 805,961 | | Performance-based rTSR | 1/27/2023 | — | — | — | 14,280 | 28,559 | 57,118 | — | 2,364,114 | | Edmund L. Quatmann, Jr. | | | | | | | | | | | Annual Incentive Plan | 1/1/2023 | 387,500 | 775,000 | 1,550,000 | — | — | — | — | — | | Time-based | 1/27/2023 | — | — | — | — | — | — | 16,815 | 881,274 | | Performance-based Adjusted EBITDA | 1/27/2023 | — | — | — | 2,943 | 5,885 | 11,770 | — | 308,433 | | Performance-based rTSR | 1/27/2023 | — | — | — | 5,465 | 10,930 | 21,860 | — | 904,785 | | Stephanie Lepori | | | | | | | | | | | Annual Incentive Plan | 1/1/2023 | 350,000 | 700,000 | 1,400,000 | — | — | — | — | — | | Time-based | 1/27/2023 | — | — | — | — | — | — | 15,188 | 796,003 | | Performance-based Adjusted EBITDA | 1/27/2023 | — | — | — | 2,658 | 5,315 | 10,630 | — | 278,559 | | Performance-based rTSR | 1/27/2023 | — | — | — | 4,936 | 9,872 | 19,744 | — | 817,204 |
Summary Compensation Table
| (1) Represents threshold, target and maximum annual incentive program opportunities under the 2023 annual incentive program. The actual amount earned for 2023 is shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. At the grant date, we believed that it was probable that the performance criteria applicable to the non-market-based PSUs would be met at target level and that each individual will remain employed through the vesting period. For the market-based PSUs (i.e., the PSUs based on rTSR), the probable outcome of achievement of the market-based TSR goals was determined using a Monte Carlo simulation model. |
Summary Compensation Table
| (2) Amounts shown represent the aggregate grant date fair value of RSUs and PSUs computed in accordance with Accounting Standards Codification 718. For a discussion of valuation assumptions, see Note 15 in our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC on February 20, 2024. Key assumptions used in the Monte Carlo simulation for determining the grant date fair value of the 2023 relative TSR PSUs included: (i) the expected term and remaining performance period of 2.93 years; (ii) a risk-free rate of 3.88% derived from two and three year continuously compounded semi-annual zero-coupon U.S. Treasury rates, interpolated to determine a 2.93 year maturity; (iii) a dividend yield of 0%; and (iv) an expected volatility of 91.23% based on the historical volatility of the Company and each member of the S&P 500 Index over the prior 2.93 years. |
Summary Compensation Table
| 46 | | 2024 PROXY STATEMENT |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Agreements
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Agreements
Deferred Compensation Plan
| | | | | | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | | | | | YEAR | SUMMARY COMPENSATION TABLE TOTAL FOR PEO (1) | COMPENSATION ACTUALLY PAID TO PEO (2) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOs (3) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOs (4) | TOTAL SHAREHOLDER RETURN (5) | PEER GROUP TOTAL SHAREHOLDER RETURN (6) | NET INCOME (LOSS) (MILLIONS) (7) | ADJUSTED EBITDA (MILLIONS) (8) | | 2023 | $18,610,359 | $15,389,438 | $5,766,189 | $5,458,300 | $78.60 | $97.99 | $828 | $3,938 | | 2022 | $31,349,920 | $(15,761,300) | $5,086,053 | $(4,320,027) | $69.75 | $76.58 | $(910) | $3,243 | | 2021 | $22,597,251 | $35,457,581 | $7,207,522 | $10,643,119 | $156.82 | $104.31 | $(1,016) | $2,990 | | 2020 | $13,692,480 | $23,627,242 | $4,944,156 | $7,883,678 | $124.53 | $108.20 | $(1,758) | $794 |
Deferred Compensation Plan
| (2) The dollar amounts reported in this column represent the amount of “compensation actually paid” to Mr. Reeg, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Reeg during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Reeg’s total compensation for 2023 to determine the compensation actually paid: |
Deferred Compensation Plan
| (4) The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the NEOs as a group (identified in Footnote 3), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable year. In accordance with the requirements of Item 402 (v) of Regulation S-K, the following adjustments were made to average total compensation for these NEOs as a group for 2023 to determine the compensation actually paid: |
NEO Compensation Actually Paid and Company Total Shareholder Return
NEO Compensation Actually Paid and Company Total Shareholder Return The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the four most recently completed fiscal years.
NEO Compensation Actually Paid and Company Total Shareholder Return
| 56 | | 2024 PROXY STATEMENT |
NEO Compensation Actually Paid and Net Income (Loss)
NEO Compensation Actually Paid and Net Income (Loss) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income (Loss) during the four most recently completed fiscal years.
NEO Compensation Actually Paid and Net Income (Loss)
| | | 57 |
NEO Compensation Actually Paid and Adjusted EBITDA
NEO Compensation Actually Paid and Adjusted EBITDA The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Adjusted EBITDA during the four most recently completed fiscal years.
NEO Compensation Actually Paid and Adjusted EBITDA
| 58 | | 2024 PROXY STATEMENT |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Compensation Committee is responsible for reviewing director compensation and making relevant recommendations to the Board. Aon, the Compensation Committee’s independent consultant, annually prepares a competitive total compensation study against the same peers as used for our annual executive compensation study. The Compensation Committee approved the following director compensation program for 2023, based on a report and recommendation provided by Aon:
DIRECTOR COMPENSATION
| COMPONENT | ANNUAL AMOUNT ($) | | Annual Retainer | 100,000 | | Annual Vice Chair Retainer | 100,000 | | Lead Independent Director | 50,000 | | Audit Committee service | 20,000 | | Compensation Committee service | 15,000 | | Corporate Social Responsibility Committee service | 15,000 | | Nominating and Corporate Governance Committee service | 10,000 | | Audit Committee Chair | 40,000 | | Compensation Committee Chair | 30,000 | | Corporate Social Responsibility Committee Chair | 30,000 | | Nominating and Corporate Governance Committee Chair | 20,000 | | Annual equity grant | 225,000 |
DIRECTOR COMPENSATION
All of our directors are reimbursed for expenses incurred in connection with their service on the Board. In addition, as a casino-entertainment and hospitality services provider, we are able to provide perquisites relating to food and beverage, hotel, entertainment and related offerings, with little or no additional cost to us, at comped values not to exceed $20,000 per year. These offerings allow members of our Board and management the opportunity to better understand and experience our products and services. Mr. Gary L. Carano and Mr. Reeg are employee directors and do not receive any compensation for their capacity as directors. Ms. Harris Jones was elected to the Board in April 2024 and therefore did not receive any compensation in 2023. The following table sets forth the compensation provided by the Company to non-employee directors during 2023:
DIRECTOR COMPENSATION
| NAME | FEES EARNED OR PAID IN CASH ($)(4) | STOCK AWARD OR UNIT ($)(5)(6) | ALL OTHER COMPENSATION ($) | TOTAL ($) | | Bonnie S. Biumi | 120,000 | 255,813 | — | 375,813 | | Jan Jones Blackhurst(1) | 130,000 | 255,813 | 16,833 | 402,646 | | Frank J. Fahrenkopf Jr. | 130,000 | 255,813 | — | 385,813 | | Don R. Kornstein(1) | 255,000 | 255,813 | 7,137 | 517,950 | | Courtney R. Mather(2) | 190,000 | 255,813 | — | 445,813 | | Michael E. Pegram(3) | 125,000 | 255,813 | — | 380,813 | | David P. Tomick | 200,000 | 255,813 | — | 455,813 |
DIRECTOR COMPENSATION
| (1) Ms. Jones Blackhurst and Mr. Kornstein receive medical, dental and vision insurance coverage under the CEC health insurance plans, which plans were assumed by the Company in connection with the merger. The amount shown under “All Other Compensation” represents the amounts paid by the Company during 2023 in connection with providing Mr. Kornstein and Ms. Jones Blackhurst with these benefits. |
DIRECTOR COMPENSATION
| (2) Mr. Mather previously elected to defer his cash retainer fees into deferred phantom stock units under the Company’s Outside Director Deferred Compensation Plan. He also elected to defer his annual equity grant for 2023 under the Company’s Outside Director Deferred Compensation Plan. In 2023, Mr. Mather was paid an additional $40,000 for missed payments for his audit committee service for the years 2021 and 2022 which was inadvertently omitted from his fee payments. |
DIRECTOR COMPENSATION
| (3) Mr. Pegram previously elected to defer his annual equity grant for 2023 under the Company’s Outside Director Deferred Compensation Plan. |
DIRECTOR COMPENSATION
| (4) Represents fees paid in cash in respect of service during the calendar year 2023. |
DIRECTOR COMPENSATION
| 60 | | 2024 PROXY STATEMENT |
DIRECTOR COMPENSATION
| (5) Amounts shown represent the grant date fair value of RSUs granted in 2023. The RSUs granted to our non-employee directors are fully-vested on the date of grant and the fair value is equal to the number of RSUs received multiplied by the closing price of our common stock on the grant date. |
DIRECTOR COMPENSATION
| (6) As of December 31, 2023, none of the non-employee directors held unvested stock awards. As of December 31, 2023, Ms. Biumi and Messrs. Fahrenkopf, Mather, Pegram and Tomick held 4,612, 49,015, 10,509, 51,979 and 41,470 deferred stock units, respectively. |
DIRECTOR COMPENSATION
Pursuant to the Caesars Entertainment, Inc. Outside Director Deferred Compensation Plan, non-employee directors have an opportunity to defer their Board compensation and equity grants. Mr. Mather has elected to defer his cash retainer fees into deferred phantom stock units, which will be settled in shares of common stock on the applicable settlement date. Mr. Mather also elected to defer his annual equity grant for 2023. As described above in the section titled “Board Leadership and Risk Oversight”, as a publicly traded corporation registered with and licensed by multiple regulatory bodies and as required by the Mississippi Gaming Commission, Nevada Gaming Commission, and New Jersey Casino Control Commission, we maintain a Compliance Committee, which currently includes independent directors Messrs. Fahrenkopf and Pegram, and non-director members Mr. A.J. “Bud” Hicks (who serves as the Chairperson and an independent member of the Compliance Committee), Anthony L. Carano, Ms. Lepori and Mr. Jeffrey Hendricks (who serves as the Compliance Officer). Mr. Quatmann also serves as an ex-officio member of the Compliance Committee. Messrs. Fahrenkopf and Pegram each received an annual cash retainer fee of $10,000 for service on the Compliance Committee, which is included in the table above.