☐ | Preliminary Proxy Statement |
☐ | ||
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material under §240.14a-12 |
☒ | No fee required. | |||
☐ | ||||
| ||||
| ||||
| ||||
| ||||
| ||||
Fee paid previously with preliminary materials. | ||||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act 14a-6(i)(1) and0-11. | |||
Amount Previously Paid:
Form, Schedule or Registration Statement No.:
Filing Party:
Date Filed:
| Our Code of Commitment:
This is our public pledge to our guests, Team Members, communities, business partners and all those we reach through our business. | |||
|
PEOPLE: We commit to supporting the wellbeing of all our Team Members, guests and local communities.
PLANET: We commit to taking care of the world we all call home.
PLAY: We commit to creating memorable experiences for our guests and leading the industry as a responsible business, including responsible gaming practices.
PLANET: We commit to taking care of the world we all call home.
PLAY: We commit to creating memorable experiences for our guests and leading the industry as a responsible business, including responsible gaming practices.
April 28, 2021
DEAR FELLOW SHAREHOLDER,
I am pleased to invite you to our 2021 Annual Meeting2023 annual meeting of Shareholders,shareholders, which will be held on Tuesday, June 15, 202113, 2023 at 9:00 a.m. Pacific Time.
Our annual meeting will be a “virtual meeting” of shareholders, whichconducted in-person at the Eldorado Resort & Casino, 345 North Virginia Street, Reno, Nevada 89501. If you choose to join us, please note that attendance will be conducted exclusively online via audio webcast. You will be able to attendrequire compliance with any then-applicable governmental requirements or recommendations, as well as facility requirements for the virtual annual meeting of shareholders online by visiting http://www.virtualshareholdermeeting.com/CZR2021.Eldorado Resort & Casino. You also will be able to vote your shares electronically at the virtual annual meeting.
Utilizing the latest technology allows us to provide expanded access, improved communication and cost savings for our shareholders and the company. We believe that hosting a virtual meeting will enable greater shareholder attendance and participation from any location around the world, particularly given the extenuating circumstances of the COVID-19 pandemic. Importantly, the virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting.
Details regarding how to attend the meeting online and the business to be conducted at the virtual annual meeting are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.
At the Annual Meeting, there will be a brief report on the current status of our business.
As permitted by the Securities and Exchange Commission, we are furnishing to shareholders our Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report primarily over the internet. On or about April 28, 2021,2023, we will mail to each of our shareholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials via the internet, and how to access the Proxy Card to vote on the internet or by telephone. The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive, free of charge, paper copies of the proxy materials. If you received the notice, then you will not receive a paper copy of the proxy materials unless you request one.
Whether or not you plan to attend the meeting, in person, it is important that your shares be represented and voted. After reading the Notice of Annual Meeting and Proxy Statement, please complete, sign and date your proxy ballot,Proxy Card, and return it in the envelope provided.
On behalf of the officers and directors of Caesars Entertainment, Inc., I thank you for your interest in the company and hope that you will be able to attend our Annual Meeting. Thank you very much forannual meeting. We appreciate your continued support.
Yours Truly,
Gary L. Carano
Executive Chairman, Board of Directors
| Yours Truly, GARY L. CARANO Executive Chairman, Board of Directors |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting2023 annual meeting of Shareholdersshareholders (the “Annual Meeting”) of Caesars Entertainment, Inc. (referred to herein as “us”, “we”, “Caesars” or the “Company”) will be held virtually and can be accessed online at http://www.virtualshareholdermeeting.com/CZR2021the Eldorado Resort & Casino, 345 North Virginia Street, Reno, Nevada 89501, on Tuesday, June 15, 202113, 2023 at 9:00 a.m. Pacific Time, for the following purposes:
1. | To elect the nine (9) director nominees to our |
2. | To hold an advisory vote to approve |
3. |
|
To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, |
To approve and adopt an amendment to the Company’s |
5. | To consider and vote on a shareholder proposal regarding Company political disclosures; |
6. | To |
7. | To transact such other business as may properly come before the |
Shareholders entitled to notice of, and to vote at, the Annual Meeting will be determined as of the close of business on April 16, 2021,17, 2023, the record date fixed by the Board of Directors for such purposes. A list of these shareholders is available at our corporate offices and will be available at the Annual Meeting.
The accompanying proxy materials include instructions on how to participate in the Annual Meeting and how to vote your shares of the Company’s stock by attending the virtual meeting by audio webcast.meeting. You will need to enter the 16-digit control number received with your Proxy or Notice of Internet Availability of Proxy Materials to vote during the meeting.
By order of the Board of Directors
Edmund L. Quatmann, Jr., Secretary
April 28, 20212023
Please sign the enclosed proxy and return it promptly in the enclosed envelope.
Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to be held on June 15, 2021: 13, 2023: Our Proxy Statement and Fiscal Year 20202022 Annual Report to Shareholders are available at http://www.proxyvote.com.www.proxyvote.com. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL MEETING. YOU MAY VOTE YOUR SHARES ELECTRONICALLY VIA THE INTERNET, BY TELEPHONE, BY MAIL, OR DURING THE VIRTUAL ANNUAL MEETING. THE NOTICE OF ANNUAL MEETING, PROXY STATEMENT AND ANNUAL REPORT ARE AVAILABLE AT WWW.PROXYVOTE.COM.WWW.PROXYVOTE.COM. PLEASE CAREFULLY REVIEW THE PROXY MATERIALS AND FOLLOW THE INSTRUCTIONS ON THE PROXY CARD TO VOTE.
2 CAESARS ENTERTAINMENT®
2021 PROXY STATEMENT 3
i |
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies by the Boardboard of Directorsdirectors (the “Board”) of Caesars Entertainment, Inc. (referred to herein as “we”, “us” or “the Company”) for use at the Annual Meetingannual meeting of Shareholdersshareholders to be held on June 15, 2021.13, 2023 (the “Annual Meeting”).
As permitted by the Securities and Exchange Commission (the “SEC”), we are furnishing to shareholders our Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report primarily over the internet. On or about April 28, 20212023 we will mail to each of our shareholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials via the internet, and how to access the Proxy Card to vote on the internet or by telephone. The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive, free of charge, paper copies of the proxy materials. If you received the notice, then you will not receive a paper copy of the proxy materials unless you request one.
A copy of our annual report with financial statements for the year ended December 31, 20202022 is enclosed. This Proxy Statement and form of proxy are to be first sent to shareholders on or about the date stated on the accompanying Notice of Annual Meeting of Shareholders.
ABOUT CAESARS ENTERTAINMENT, INC.
Caesars Entertainment, Inc. (referred to herein as “us”, “we”, “Caesars” or the “Company”) (NASDAQ: CZR) is the largest casino-entertainment company in the U.S., and one of the world’s most diversified casino-entertainment providers. On July 20, 2020, the Company (f/k/a Eldorado Resorts, Inc. (“ERI”)) acquired Caesars Entertainment Corporation and its subsidiaries (“Former Caesars”) pursuant to a merger of a wholly ownedwholly-owned subsidiary of ERI with and into Former Caesars, with Former Caesars surviving as a wholly-owned subsidiary of the CompanyERI (the “Merger”). ERI changed its name to Caesars Entertainment, Inc. and changed its ticker symbol on the NASDAQ Stock Market from “ERI” to “CZR”. As a result of this historic and transformative business combination,
Since its beginning in Reno, NV, in 1937, the Company ishas grown through development of new resorts, expansions and acquisitions. Caesars Entertainment, Inc.’s resorts operate primarily under the largest casino-entertainment company in the U.S., and one of the world’s most diversified casino-entertainment providers across the U.S., boasting many of the world’s most prestigious gaming brands, including Caesars Palace®, Harrah’s®, Horseshoe®, and Eldorado®, among many others. brand names. The Company offers diversifiedgaming, entertainment and hospitality amenities, one-of-a-kind destinations and one-of-a-kind destination, with a focusfull suite of mobile and online gaming and sports betting experiences. All tied to its industry-leading Caesars Rewards loyalty program, the Company focuses on building loyalty and value with its guests through a unique combination of impeccable service, operational excellence and technology leadership.
PURPOSE OF THE MEETING
1 |
PURPOSE OF THE MEETING
PROPOSAL 1 | To
The Board has nominated all nine (9) current directors, 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, to be elected to serve a one-year term until the annual meeting of shareholders in
• 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 |
4 CAESARS ENTERTAINMENT®
PROPOSAL 2 | To Approve, on an Advisory, Non-binding Basis, Named Executive Officer Compensation.
We are providing shareholders with the opportunity to cast an advisory, non-binding vote |
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,
Shareholders may vote to ratify the Audit Committee’s reappointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for |
Shareholders may vote to ratify the reappointment by the Audit Committee of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2021.
PROPOSAL
| To Approve and Adopt an Amendment to the Company’s
Shareholders may vote to approve and adopt |
• On April 8, 2021, the Board unanimously voted to approve and adopt the amendment.
2 | 2023 PROXY STATEMENT |
2021 PROXY STATEMENT 5
PROPOSAL 5 | To Consider and Vote on a Shareholder Proposal Regarding Company Political Disclosures. The Board recommends that shareholders vote AGAINST the shareholder proposal regarding Company political disclosures The Company has received a shareholder proposal requesting the Company to provide a report, updated semiannually, disclosing the Company’s (1) policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum; and (2) monetary and non-monetary contributions and expenditures (direct or indirect) used in the manner described in clause 1 above, including (a) the identity of the recipient as well as the amount paid to each and (b) the title of the person(s) in the Company responsible for decision-making. The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending. |
PROPOSAL 6 | To Consider and Vote on a Shareholder Proposal Regarding Board Matrix. The Board recommends that shareholders vote AGAINST the shareholder proposal regarding Board matrix The Company has received a shareholder proposal requesting that the Board disclose in its annual proxy statement each director/nominee’s self-identified gender and race/ethnicity, as well as the skills and attributes that are most relevant in light of Caesars’ business, long-term strategy and risks. The requested information shall be presented in matrix format and shall not include any attributes the Board identifies as minimum qualifications for all director candidates. |
|
| 3 |
At the Annual Meeting, shareholders are being asked to elect nine (9) director nominees to our Board, each to serve as a director until the 2024 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. Directors will be elected by the affirmative vote of the holders of a majority of the shares represented in person or by proxy at the meeting. Shareholders may not vote their shares cumulatively in the election of directors. Proxies cannot be voted for a greater number of persons than the number of nominees named.
Any shareholder submitting a proxy has the right to withhold authority to vote for an individual nominee by writing that nominee’s name in the space provided on the proxy. Shares represented by all proxies received by us and not marked to withhold authority to vote 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.
6 CAESARS ENTERTAINMENT®
PROPOSAL 1 — ELECTION OF DIRECTORS
4 |
|
| ||||||
| |||||||
Gary L. Carano Executive Chairman of the Board Director since | |||||||
| |||||||
| |||||||
| |||||||
| |||||||
2021 PROXY STATEMENT 7
PROPOSAL 1 - ELECTIONOFDIRECTORS
| ||||||
| ||||||
| ||||||
| ||||||
8 CAESARS ENTERTAINMENT®
CORPORATE GOVERNANCE AND BOARD MATTERS
BOARD COMPOSITION AND NOMINATION PROCESS
OUR BOARD OF DIRECTORS
During 2020 and prior to the Merger, our Board consisted of Gary L. Carano, Bonnie S. Biumi, Frank J. Fahrenkopf, James B. Hawkins, Gregory J. Kozicz, Michael E. Pegram, Thomas R. Reeg, David P. Tomick and Roger P. Wagner. Pursuant to the Merger Agreement, upon the closing of the Merger, the size of the Board was expanded from nine to eleven members and, immediately following the Merger, Messrs. Hawkins, Kozicz and Wagner resigned as a member of the Board, and Keith Cozza, Janis Jones Blackhurst, Don R. Kornstein, Courtney R. Mather and James Nelson, each of whom was an incumbent member of the board of directors of Former Caesars, became a member of the Board. Mr. Cozza resigned from the Board on July 24, 2020 and Mr. Nelson resigned from the Board on October 23, 2020. The size of the Board has been reduced to nine members. As of the date of this Proxy Statement, our Board consists of the following nine members: 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.
Below is information as of April 12, 2021 concerning the business experience and qualifications of each of our director nominees whose term, if elected, will expire at the 2022 annual meeting.
DIRECTOR NOMINEES
Gary L. Carano, Director and Executive Chairman
|
| |
|
2021 PROXY STATEMENT 9
CORPORATEGOVERNANCEANDBOARDMATTERS
Bonnie S. Biumi, Director
|
| |
|
Jan Jones Blackhurst, Director
|
| |
|
10 CAESARS ENTERTAINMENT®
CORPORATEGOVERNANCEANDBOARDMATTERS
|
| |
| ||
|
| |
|
2021 PROXY STATEMENT 11
CORPORATEGOVERNANCEANDBOARDMATTERS
|
| |
| ||
|
| |
|
12 CAESARS ENTERTAINMENT®
CORPORATEGOVERNANCEANDBOARDMATTERS
| |||
|
2014) | ||
| |||
| |||
|
| ||
|
SELECTION OF DIRECTORS
DIRECTOR NOMINATIONS
The Nominating and Corporate Governance Committee identifies and evaluates all director candidates in accordance with the director qualification standards described in the Nominating and Corporate Governance Committee Charter. In identifying candidates, the Nominating and Corporate Governance Committee has the authority to engage and terminate any third-party
2021 PROXY STATEMENT 13
CORPORATEGOVERNANCEANDBOARDMATTERS
search firm that is used to identify director candidates and has the authority to approve the fees and retention terms of any search firm. The Nominating and Corporate Governance Committee evaluates any candidate’s qualifications to serve as a member of our Board based on the totality of the merits of the candidate and not based on minimum qualifications or attributes. In evaluating a candidate, the Nominating and Corporate Governance Committee takes into account the background and expertise of individual Board members as well as the background and expertise of our Board as a whole. In addition, the Nominating and Corporate Governance Committee evaluates a candidate’s independence and his or her background and relationships, and expertise in the context of our Board’s needs.
The Nominating and Corporate Governance Committee Charter requires that the Nominating and Corporate Governance Committee ascertain that each nominee has: (i) demonstrated business and industry experience that is relevant to us; (ii) the ability to meet the suitability requirements of all relevant regulatory agencies; (iii) freedom from potential conflicts of interest with us and independence from management with respect to independent director nominees; (iv) the ability to represent the interests of shareholders; (v) the ability to demonstrate a reasonable level of financial literacy; (vi) the availability to work with us and dedicate sufficient time and energy to his or her board duties; (vii) an established reputation for good character, honesty, integrity, prudent business skills, leadership abilities as well as moral and ethical bearing; and (viii) the ability to work constructively with our other directors and management. The Nominating and Corporate Governance Committee may also take into consideration whether a candidate’s background and skills meet any specific needs of the Board that the Nominating and Governance Committee has identified.
When considering whether the Board’s directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Board focused primarily on the information discussed in each Board member’s biographical information set forth below under “Our Board of Directors.”
DIVERSITY AND INCLUSION
In recruiting and evaluating new director candidates, the Nominating and Corporate Governance Committee considers such factors as industry background, financial and business experience, public company experience, other relevant education and experience, general reputation, independence and diversity. The Nominating and Corporate Governance Committee considers gender and ethnic/racial diversity, because having diverse backgrounds and points of view benefits our Board and the Company. Searches for director candidates include persons who bring diversity with respect to self-identified characteristics such as gender, race, ethnicity and sexual orientation in the initial list of qualified candidates. We believe that each director contributes to the Board’s overall diversity by way of characteristics, and also by way of each director’s unique opinions, perspectives and personal and professional experiences and backgrounds.
SHAREHOLDER PROPOSALS FOR THE NEXT MEETING
Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), proposals of shareholders intended for inclusion in the proxy statement for the Annual Meeting of Shareholders to be held in 2022 must be received at our executive offices not later than December 29, 2021. Proponents should submit their proposals by Certified Mail-Return Receipt Requested. Proposals received after that date will be deemed untimely.
To otherwise present a timely proposal or other business for consideration by our shareholders at the 2022 Annual Meeting of Shareholders, pursuant to our Bylaws (the “Bylaws”), a shareholder’s written notice must be delivered to or mailed and received at our principal executive offices no earlier than the close of business on February 12, 2022 nor later than the close of business on March 14, 2022, as required under the applicable provisions of our Bylaws. In addition, not less than sixty days prior to the date of the next meeting of shareholders called for the election of directors (“Election Meeting”), a shareholder who intends to make a nomination of a candidate for election as director of the Company at the Election Meeting shall, as required by our Bylaws, deliver to our Secretary a notice setting forth (a) the name, age, business address and the residence address of each nominee proposed in such notice, (b) the principal occupation or employment of such nominee, (c) the number of shares of our capital stock which are beneficially owned by each such nominee, and (d) such other information concerning each such nominee as would be required, under the rules of the SEC, in a proxy statement soliciting proxies for the election of such nominees. Such notice shall include a signed consent of each such nominee to serve as a director of the corporation, if elected. This notice requirement does not apply to shareholder proposals properly submitted for inclusion in our proxy statements in accordance
14 CAESARS ENTERTAINMENT®
CORPORATEGOVERNANCEANDBOARDMATTERS
with the rules of the Securities and Exchange Commission and shareholder nominations of director candidates which must comply with the Nominating and Corporate Governance Committee Charter described elsewhere in this Proxy Statement. Our Bylaws are posted on the Governance page of our website located at http://investor.caesars.com/corporate-governance.
DIRECTOR INDEPENDENCE
For a director to be considered independent, the director must meet the bright line independence standards under the listing standards of The NASDAQ Stock Market, Inc. (“NASDAQ”) and the Board must affirmatively determine that the director has no relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board determines director independence based on an analysis of the independence requirements of the NASDAQ listing standards. In addition, the Board will consider all relevant facts and circumstances in making an independence determination.
Our Board has affirmatively determined that each current director, except Mr. Carano and Mr. Reeg, is independent under the NASDAQ listing standards. In addition, our former directors who served during 2020 prior to the Merger were also affirmatively determined to be independent. In determining the independence of directors, the Board considered all commercial, industrial, banking, consulting, legal, accounting, charitable, familial or other business and personal relationships any director may have with us. Based on the NASDAQ listing standards, Mr. Carano and Mr. Reeg are not considered independent because of their current positions as executive officers of the Company. In determining that Mr. Pegram is independent, the Board considered the personal and business relationships that Mr. Pegram has had with the Carano family over the past 20 years. The Board affirmatively determined that such relationship would not interfere with Mr. Pegram’s ability to exercise independent judgment in carrying out his responsibilities as a director. In determining that Ms. Jones Blackhurst is independent, the Board considered Ms. Jones Blackhurst’s role as the Executive Vice President, Public Policy and Corporate Responsibility of Former Caesars from May 2017 through September 2019, and affirmatively determined that such relationship would not interfere with her ability to exercise independent judgment in carrying out her responsibilities as a director.
To effectively support its responsibilities, the Board currently has four (4) committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Corporate Social Responsibility Committee. Each committee is currently comprised solely of independent directors and during 2020 each of our standing committees was comprised solely of independent directors. The Company also has a Compliance Committee, which is discussed in more detail below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is, or during 2020 was, or has previously been, an officer or employee of us or our subsidiaries. During 2020, no member of the Compensation Committee had any direct or indirect material interest in a transaction or a business relationship with us that would require disclosure under the rules of the SEC relating to disclosure of related party transactions. In 2020, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on our Board or the Compensation Committee.
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors, executive officers, and the persons who beneficially own more than ten percent of the shares of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to us. Based solely on the reports received by us and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements during the years ended December 31, 2020, except that, due to an administrative error, a Form 4 for Mr. Mather reporting one transaction was filed late.
2021 PROXY STATEMENT 15
CORPORATEGOVERNANCEANDBOARDMATTERS
BOARD STRUCTURE AND RESPONSIBILITIES
BOARD LEADERSHIP AND RISK OVERSIGHT
Mr. Gary L. Carano is Executive Chairman of the Board of Directors, Mr. Reeg is our Chief Executive Officer and Mr. Anthony L. Carano is our President and Chief Operating Officer. In these roles, Messrs. Reeg and Anthony L. Carano have general charge and management of our affairs, property and business, while Mr. Gary L. Carano provides independent oversight of senior management and Board matters and serves as a valuable bridge between our Board of Directors and our management. In addition, the Executive Chairman provides guidance to the Chief Executive Officer, sets the agenda of the Board of Directors in consultation with the Chief Executive Officer and Lead Independent Director and presides over meetings of shareholders and the Board.
Mr. Tomick is our Lead Independent Director. He has, in addition to the powers and authorities of any member of the Board of Directors, the power and authority to chair executive sessions and to work closely with the Executive Chairman in determining the appropriate schedule for the Board of Directors meetings. In his role as Lead Independent Director, Mr. Tomick serves as a liaison between the independent directors and Executive Chairman and Chief Executive Officer and leads the Board’s evaluation of the Executive Chairman and Chief Executive Officer. Mr. Tomick also is responsible for being available for consultation and direct communication with major shareholders and responding directly to shareholder questions, as appropriate. The Lead Independent Director position is at all times held by a director who is “independent” as defined in Nasdaq Rule 5605(a)(2).
The Board appointed Mr. Kornstein as Vice Chair effective as of the Merger. In his role as Vice Chair, Mr. Kornstein is tasked with providing an additional layer of independent leadership relating to Board matters, including presiding at all meetings of the Board when neither the Executive Chairman nor the Lead Independent Director is present, reviewing and approving meeting agendas and ensuring there is sufficient time to discuss all agenda items, approving the quality, quantity and timeliness of information sent to the Board, and playing an increased role in crisis management oversight, to the extent applicable. In addition to his Vice Chairman duties, and given his extensive industry experience, Mr. Kornstein provides management and the Board with valuable insight and guidance with respect to strategic matters. This includes being available to provide an enhanced level of input and evaluation with respect to strategic initiatives and other operational matters, as well as providing an independent perspective that is rooted in both industry and tactical business experience.
The Board believes that this leadership structure is appropriate at this time. Although the roles of Chief Executive Officer and Chairman of the Board are currently separate, the Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes it is in our best interests and the best interests of our shareholders to make that determination based on the position and direction of our Company and the composition of the Board. Maintaining a position of Lead Independent Director and an independent Vice Chair provides an extra layer of independent oversight, and we believe this structure facilitates independent oversight of management while fostering effective communication between our management and the Board.
In addition, 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 implements and administers our Compliance Plan. The Compliance Committee’s duties include investigating key employees, vendors of goods and services, sources of financing, consultants, lobbyists and others who wish to do substantial business with us or our subsidiaries and making recommendations to our management concerning suitability. Our Compliance Committee currently includes independent directors Messrs. Fahrenkopf and Pegram, and non-director members A.J. “Bud” Hicks (who serves as the chairperson and an independent member of the Committee), Anthony L. Carano, Stephanie Lepori and Jeffrey Hendricks (who serves as the Compliance Officer). Mr. Edmund L. Quatmann, Jr. also serves as an ex-officio member of the Compliance Committee. The Compliance Committee held four meetings in 2020.
Our senior management is responsible for the day-to-day assessment and management of our risks, and our Board is responsible for oversight of our enterprise risk management in general. The risks facing us include risks associated with our financial condition, liquidity, cybersecurity and data privacy, operating performance, ability to meet our debt and master lease obligations and regulations applicable to our operations and compliance therewith. The Board’s oversight is primarily managed and coordinated through Board committees. Our Audit Committee oversees risk management with respect to our significant
16 CAESARS ENTERTAINMENT®
CORPORATEGOVERNANCEANDBOARDMATTERS
financial and accounting policies, as well as the effectiveness of management’s processes that monitor and manage other key business risks, and the Compliance Committee is responsible for overseeing risks associated with our gaming activities and regulatory compliance. The Board is responsible for reviewing our cybersecurity risk profile and is regularly updated (at least once a year) by the Company’s Senior Vice President of Technology (who also holds the title of Chief Information Security Officer) on the cybersecurity risks and threats facing the Company, which findings are reviewed and discussed by the Audit Committee. The Board is further briefed on actions and changes taken by management to mitigate the Company’s risk profile and provided with an overview of the cybersecurity strategy along with key cybersecurity initiatives, such as Team Member training and awareness building, and related matters. Additionally, the Compensation Committee oversees risks related to compensation policies. Our Corporate Social Responsibility Committee is responsible for managing risk associated with climate change, responsible gaming, staff and customer well-being, maintaining sustainable operations, diversity and inclusion throughout the organization. The Audit, Compensation, Corporate Social Responsibility Committee and Compliance Committees report their findings to the full Board. In addition, at its meetings, the Board discusses risks that we face, including those management has highlighted as the most relevant risks. Furthermore, the Board’s oversight of enterprise risk involves assessment of the risk inherent in our long-term strategies, as well as other matters brought to the attention of the Board. We believe that the structure and experience of our Board allows our directors to provide effective oversight of risk management. The Board recognizes that it is our responsibility and the responsibility of our management to identify and attempt to mitigate risks that could cause significant damage to our business or shareholder value.
EXECUTIVE SESSION AND ATTENDANCE
Our Corporate Governance Guidelines provide that the independent directors must meet at least twice annually in executive session and that independent directors will have the opportunity to convene in executive session at every meeting of the Board, in their discretion. Our independent directors met in executive sessions, without management present, at the majority of all regularly scheduled Board meeting during 2020.
During 2020, our Board held 14 meetings (seven meetings prior to the Merger and seven meetings following the Merger), and also acted by unanimous written consent 11 times during 2020. Each incumbent director attended at least 75% of the Board meetings and meetings of the committees of the Board on which such director served during 2020 and that were held during the period for which he or she served as a director or as member of such committee. In addition to Board and committee meetings, directors are encouraged to attend the Annual Meeting of Shareholders. Gary L. Carano attended our 2020 Annual Meeting of Shareholders.
BOARD OVERSIGHT
General.Our Board provides the ultimate oversight of the Company and oversees and advises members of management who are responsible for the day-to-day operations and management of the Company. The Board has developed a number of specific expectations of its directors, set forth in the Company’s Corporate Governance Guidelines, to promote the discharge of the Board’s responsibilities and the efficient conduct of the Board’s business.
Management Succession Planning.Our Board oversees the management continuity planning process and periodically reviews the Company’s succession plans and leadership development programs.
Code of Ethics.We have adopted a Code of Ethics and Business Conduct, which includes our Conflicts of Interest Policy, applicable to all directors and employees, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The code of ethics and business conduct is posted on our website, investor.caesars.com/corporate-governance under “Governance—Documents” and a printed copy will be delivered on request by writing to the Corporate Secretary at Caesars Entertainment, Inc. c/o Corporate Secretary, 100 West Liberty Street, 12th Floor, Reno, Nevada, 89501. We intend to satisfy the disclosure requirement regarding certain amendments to, or waivers from, provisions of our code of ethics and business conduct by posting such information on our website.
CORPORATE SOCIAL RESPONSIBILITY
Our Board and executive officers view Corporate Social Responsibility (“CSR”) as an integral element in the way we do business, in the belief that being a good corporate citizen helps protect the company against risk, contributes to improved performance and helps foster positive relationships with all those with whom we connect. The Board and our executive management are
2021 PROXY STATEMENT 17
CORPORATEGOVERNANCEANDBOARDMATTERS
committed to being an industry leader in CSR (which includes diversity, equity and inclusion, social impact, and environmental sustainability). In 2020, the Board and our leadership continued to engage with our CEO-level external CSR Advisory Board comprised of experts representing Environmental Social Governance (“ESG”), diversity, equity and inclusion (“DEI”), sustainability and social impact, and used their guidance to confirm our CSR priorities. These priorities are reflected in our eleventh annual CSR report, published in 2020 in accordance with Global Reporting Initiative Standards.
CSR Committee of the Board
Led by our newly-constituted Corporate Social Responsibility Committee, our Board oversees the Company’s corporate social responsibility initiatives.
Code of Commitment
The Company is committed to being a responsible corporate citizen and environmental steward through our CSR strategy, PEOPLE PLANET PLAY. This is reflected in our Code of Commitment which is our public pledge to our guests, Team Members, communities, business partners and all those we reach that we will honor the trust they have placed in us through ethical conduct and integrity. We commit to:
|
|
|
PEOPLE PLANET PLAY Strategy
Our PEOPLE PLANET PLAY strategy defines how we meet the obligations of our Code of Commitment and is aligned with global priorities articulated by the United Nations as the Sustainable Development Goals. PEOPLE PLANET PLAY establishes multi-year targets in key areas of impact, including science-based greenhouse gas emissions-reduction, formally approved by the Science Based Targets Initiative (“SBTi”), aligning with global best practices on climate change action. We are reviewing our PEOPLE PLANET PLAY targets and expect to publish our targets after our first year as a combined entity.
Responsible Gaming
The Company maintains a responsible gaming (“RG”) program which serves as the standard bearer for the gaming industry. We train tens of thousands of Team Members each year and a cadre of RG Ambassadors throughout our properties to identify guests in need of assistance and provide support. The Company has contributed to the National Center for responsible gaming, the National Council on Problem Gaming and other state programs to help advance responsible practices in the gaming industry.
Environmental Stewardship
We take a proactive approach to environmental sustainability through our CodeGreen strategy, which was established by Former Caesars in 2007 and is being continued by the Company, consistently improving our performance across energy and greenhouse gas emissions efficiencies, reduction of water consumption and increasing waste diversion from landfills. The Company recognizes the impact climate change can play both on our business and the guests we serve. Identifying, assessing, and managing the risks and opportunities therefore plays a vital role in our long-term strategic thinking on climate and water, and how we approach our CSR goals. Between 2011 and 2019, Former Caesars reduced its absolute Scope 1 and 2 greenhouse gas (“GHG”) emissions by 19.7%. In 2019, Former Caesars further committed to mitigating its impact on climate change by updating previously approved science based targets to be in line with well below 2 degrees Celsius per SBTi: (i) reducing absolute Scope 1 and 2 GHG emissions by 35% by 2025, and 100% by 2050 from a 2011 base-year and (ii) having 60% of suppliers by spend institute science-based GHG reduction targets for their operations by 2023. In 2021, we expect to establish a new baseline in order to reaffirm our targets and goals as a combined company. The Company is pursuing renewable energy sources and low-carbon options, including on site solar developments. Our long-term goals include evaluating energy supply for each of our properties in pursuit of our SBTs.
We voluntarily participate in the CDP (formerly the Carbon Disclosure Project), an international nonprofit that drives sustainable economies and encourages sustainable operations. In 2020, the Company made the A List for climate and water security and earned a spot on the Supplier Engagement Leaderboard from CDP. Just 5% of companies assessed by CDP make A
18 CAESARS ENTERTAINMENT®
CORPORATEGOVERNANCEANDBOARDMATTERS
List and only 7% make the Supplier Engagement Leaderboard. We are committed to creating and investing in policies and procedures towards CSR efforts. In order to engage guests in our CSR efforts, we have branded our hotel rooms with our PEOPLE PLANET PLAY messaging, inviting guests to play a role by using water, air-conditioning and towels with the environment in mind. We promote sustainable sourcing of key food ingredients for our menus from sustainably managed farms and fisheries.
Community Investment
The Company contributes extensively to our local communities to help them develop and prosper, through funding community projects, employee volunteering and cash donations from the Caesars Foundation, a private foundation funded from our operating income. In 2020, the Caesars Foundation contributed $1.3 million to communities across the United States with an emphasis on COVID-19 pandemic relief at the local level through food and shelter insecurity, wellness and workforce development programs. The Foundation also continued to support significant national relationships that support diversity equity and inclusion.
The Corporate Social Responsibility Committee evaluates the emergent environmental, social and governance-related risks and the Company’s social and environmental goals (including diversity and inclusion efforts), including the policies and programs instrumental in achieving short- and long-term targets, presented at least annually by management. Our corporate social responsibility framework is branded under the theme PEOPLE, PLANET, PLAY. This approach unites all our properties and business activities behind a shared framework with a common language to more effectively support sustainable, ethical and profitable business growth. Our PEOPLE, PLANET, PLAY platform builds on many years of investment across all aspects of citizenship, including responsible gaming, diversity, equity and inclusion, community impact, environmental stewardship, human capital management, and human rights. We report transparently on our citizenship performance each year in line with Global Reporting Initiative Standards, the leading global sustainability reporting standard.
Diversity, Equity and Inclusion
We embrace diversity and aim to create an inclusive working environment that celebrates all our Team Members as individuals. Our DEI framework identifies five pillars of activity: advocacy, Team Members, suppliers, communities and guests for a holistic approach to embedding DEI in everything we do. We publish our DEI data in our annual CSR report (described above). As an example of our gender diversity, in 2020, 44% of leadership roles in the Company were held by women and 40% were held by people of color. In 2021, we set our new goals around gender and racial diversity. By 2025, 50% of leadership roles will be held by women. Furthermore, by 2025, 50% of leadership roles will be held by people of color.
CORPORATE GOVERNANCE GUIDELINES
The matters discussed above reflect the Board’s commitment to a system of governance that enhances corporate responsibility and accountability. The Corporate Governance Guidelines contain provisions addressing the following matters, among others:
Board size;
Director qualifications and membership criteria;
Director independence;
Director responsibilities;
Board meetings and attendance and participation at those meetings;
Board committees;
Executive sessions;
Director orientation, training and continuing education;
Director compensation;
Performance evaluation of the Board and its committees; and
Public interactions.
2021 PROXY STATEMENT 19
CORPORATEGOVERNANCEANDBOARDMATTERS
Learn more about our governance practices, procedures and philosophies by visiting the Governance page of our website located at http://investor.caesars.com, where you will find our Corporate Governance Guidelines, committee charters and other important governance documents. We intend to disclose any future amendments to the Corporate Governance Guidelines on our website.
COMMITTEES OF THE BOARD
Prior to the Merger, the Board maintained three (3) standing committees of the Board: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Shortly following the Merger, the Board’s standing committees were re-constituted as a result of the change in Board membership effectuated by the Merger, and the Board elected a new independent chair of the Compensation Committee. In addition, the Board formed a new Corporate Social Responsibility Committee as a standing committee of the Board and elected an independent chair to that committee. The Board has determined that each committee member is independent as defined in the NASDAQ listing standards. The Board has adopted a written charter for each of these committees. The charter for each of these committees is available on the Governance page of our website located at http://investor.caesars.com/corporate-governance.
In this proxy statement, references to the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Corporate Social Responsibility Committee, as applicable, are intended to refer to such committee, however constituted, at the relevant time.
The chart below reflects the composition of the standing committees of our Board as of the date of this Proxy Statement:
| ||||||||
Bonnie S. Biumi | ||||||||
|
| |||||||
|
| |||||||
|
| |||||||
| ||||||||
| ||||||||
|
|
20 CAESARS ENTERTAINMENT®
CORPORATEGOVERNANCEANDBOARDMATTERS
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) | |||
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) |
5 |
BOARD COMPOSITION AND NOMINATION PROCESS
OUR BOARD OF DIRECTORS
During 2022, our Board consisted of Gary L. Carano, Bonnie S. Biumi, Jan Jones Blackhurst, Frank J. Fahrenkopf, Don R. Kornstein, Courtney R. Mather, Sandra D. Morgan, Michael E. Pegram, Thomas R. Reeg and David P. Tomick. Ms. Morgan resigned as a Member of the Board effective July 15, 2022, following her appointment as President of the Las Vegas Raiders of the National Football League.
Below is information as of April 17, 2023 concerning the business experience and qualifications of each of our 2023 director nominees.
6 | 2023 PROXY STATEMENT |
DIRECTOR NOMINEES
Age: 71
Director Since: July 2020 (Director of
ERI since September 2014)
Committees: None
EXPERIENCE
Mr. Carano has been Executive Chairman of our Board since July 2020 and was Executive Chairman of 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. 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. 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. Carano serves on the board of directors of Recreational Enterprises, Inc., a less than 5% shareholder of the Company. Mr. 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
Mr. Carano brings to the Board extensive experience in the gaming and hospitality industry and deep familiarity with the business of the Company.
Age: 61
Director Since: July 2020 (Director
of ERI since May 2017)
Committees: Audit
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 Pricewaterhouse. 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. Ms. Biumi serves on the board of Kite Realty Trust Group, a publicly traded company, and on the boards of Virgin Cruises Limited and Virgin Cruises Intermediate Limited, both private companies. She is a Certified Public Accountant.
QUALIFICATIONS
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.
7 |
Age: 74
Director Since: July 2020
Committees: Corporate Social
Responsibility (Chair)
EXPERIENCE
Ms. Jones Blackhurst served as a director of Former Caesars from October 2019 until the Merger in July 2020, at which time she joined the Board. Ms. Jones Blackhurst served as Executive Vice President, Public Policy and Corporate Responsibility of Former Caesars from May 2017 through September 2019. Ms. Jones Blackhurst also served as Executive Vice President of Communications and Government Relations of Former Caesars from November 2011 until May 2017 and as Senior Vice President of Communications and Government Relations of Former Caesars from November 1999 to November 2011. 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 as a board member of Esports Entertainment Group since March 2022 where she also serves as Chair of the audit committee and a member of the compensation committee. Since February 2021, Ms. Jones Blackhurst has served as a director of Gaming & Hospitality Acquisition Corp. Prior to joining Former Caesars, Ms. Jones Blackhurst served two terms as Mayor of Las Vegas, from 1991 until 1999.
QUALIFICATIONS
Ms. Blackhurst brings to the Board significant experience in corporate social responsibility matters, including specifically within the gaming industry, including policies on responsible gaming and government relations experience.
Age: 83
Director Since: July 2020 (Director
of ERI since September 2014)
Committees: Nominating and
Corporate Governance (Chair)
EXPERIENCE
Mr. Fahrenkopf has served on the Board since July 2020 and served on the board of ERI from 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 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 companies: First Republic Bank, Gabelli Equity Trust, Inc., Gabelli Utility Trust, Gabelli Global Multimedia Trust, Gabelli Dividend and Income Trust, Gabelli Gold and Natural Resources, Gabelli Small & Midcap Value Fund, Gabelli Goanywhere Trust, Gabelli Natural Resources, Gold & Income Trust, Gabelli NextShares Trust, Bankcroft Fund and Ellsworth Growth & Income Trust.
QUALIFICATIONS
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.
8 | 2023 PROXY STATEMENT |
Age: 71
Director Since: July 2020
Committees: Compensation (Chair),
Nominating and Corporate Governance,
Corporate Social Responsibility
EXPERIENCE
Mr. Kornstein is our 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 Former Caesars 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 Former Caesars. 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.
QUALIFICATIONS
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.
Age: 46
Director Since: July 2020
Committees: Compensation, Audit,
Corporate Social Responsibility
EXPERIENCE
Mr. Mather served as a director of Former Caesars from March 2019 until the Merger in July 2020, at which time he joined the Board. Mr. Mather serves as CEO and CIO of Vision One, an investment fund. Mr. Mather served as Managing Director and Portfolio Manager of Icahn Capital LP, from December 2016 to March 2020, and was previously 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 Newell Brands Inc., a manufacturer and marketer of a broad range of consumer products, 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
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.
9 |
Age: 71
Director Since: July 2020 (Director
of ERI since September 2014)
Committees: Compensation
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 Gpeg 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. Mr. Pegram currently serves as a director of, and 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.
QUALIFICATIONS
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.
Age: 51
Director Since: July 2020 (Director
of ERI since September 2014)
Committees: None
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 serves on the board of directors of Recreational Enterprises, Inc., a shareholder of the Company. 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
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.
10 | 2023 PROXY STATEMENT |
Age: 71
Director Since: July 2020 (Director
of ERI since September 2014)
Committees: Audit (Chair),
Nominating and Corporate Governance
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., Gryppers, Inc., Autocam Medical and First Choice Packaging and has served on the board of the following organizations: Autocam Corporation, NuLink Digital and TransLoc, Inc.
QUALIFICATIONS
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.
11 |
SELECTION OF DIRECTORS
DIRECTOR NOMINATIONS—QUALIFICATIONS, SKILLS, TENURE, DIVERSITY & INCLUSION
Qualifications
The Nominating and Corporate Governance Committee identifies and evaluates all director candidates in accordance with the director qualification standards described in the Nominating and Corporate Governance Committee Charter. In identifying candidates, the Nominating and Corporate Governance Committee has the authority to engage and terminate any third-party search firm that is used to identify director candidates and has the authority to approve the fees and retention terms of any search firm. The Nominating and Corporate Governance Committee evaluates any candidate’s qualifications to serve as a member of our Board based on the totality of the merits of the candidate and not based on minimum qualifications or attributes. In evaluating a candidate, the Nominating and Corporate Governance Committee takes into account the background and expertise of individual Board members as well as the background and expertise of our Board as a whole. In addition, the Nominating and Corporate Governance Committee evaluates a candidate’s independence and his or her background and relationships, and expertise in the context of our Board’s needs.
The Nominating and Corporate Governance Committee Charter requires that the Nominating and Corporate Governance Committee ascertain that each nominee has: (i) demonstrated business and industry experience that is relevant to us; (ii) the ability to meet the suitability requirements of all relevant regulatory agencies; (iii) freedom from potential conflicts of interest with us and independence from management with respect to independent director nominees; (iv) the ability to represent the interests of shareholders; (v) the ability to demonstrate a reasonable level of financial literacy; (vi) the availability to work with us and dedicate sufficient time and energy to his or her board duties; (vii) an established reputation for good character, honesty, integrity, prudent business skills, leadership abilities and moral and ethical bearing; and (viii) the ability to work constructively with our other directors and management. The Nominating and Corporate Governance Committee may also take into consideration whether a candidate’s background and skills meet any specific needs of the Board that the Nominating and Corporate Governance Committee has identified.
Diversity and Inclusion
In recruiting and evaluating new director candidates, the Nominating and Corporate Governance Committee also considers such factors as gender and diversity. The Nominating and Corporate Governance Committee considers gender and ethnic/racial diversity because having diverse backgrounds and points of view benefits our Board and the Company. Searches for director candidates include persons who bring diversity with respect to self-identified characteristics such as gender, race, ethnicity and sexual orientation in the initial list of qualified candidates. We believe that each director contributes to the Board’s overall diversity by way of characteristics, and also by way of each director’s unique opinions, perspectives and personal and professional experiences and backgrounds.
Since the Merger, the Board has taken a number of steps to engage in outreach and develop touch points with candidates for the Board who would represent a diverse perspective and background, and will continue with these efforts. As part of this outreach, the Board has identified potential diverse candidates through a variety of channels, word of mouth and other professional relationships. As of the date of this Proxy Statement, two of our nine director nominees self-identify as female. As of the date of the 2022 annual meeting of shareholders, the Company had one director, Ms. Sandra D. Morgan, serving on the Board who self-identified as both African American and Asian. Ms. Morgan resigned from the Board on July 15, 2022 as a result of her appointment as President of the Las Vegas Raiders of the National Football League. The Board understands the importance of maintaining a balanced level of diversity amongst its members and is committed to doing so.
Skills, Experience and Competencies
In addition to these baseline qualifications, the Nominating and Corporate Governance Committee considers such factors as industry background, financial and business experience, public company experience and other relevant education and experience. The Nominating and Corporate Governance Committee and other members of the Board believe it is important for the full Board to leverage the individual skills and experience of each director in order to fulfill its oversight role, and support the interests of shareholders as a collective body.
Below is a summary of certain skills, experience and competencies that the Board considers of particular relevance, along with an explanation as to why each such skill, experience and competency supports the overall function of the Board. The yellow shading indicates that the skill, experience or competency is of particular importance to the director’s ability to meaningfully contribute to Board discussions and deliberations, given how these skills, experience and competencies relate to our business and long-term strategies (referred to as “core competencies”).
12 | 2023 PROXY STATEMENT |
*Operational/Executive Leadership/Public Company Leadership Experience: Experience as an executive officer, specifically at a public company, may better allow a director to understand and contribute to matters such as strategic planning, financial reporting and day-to-day operations. |
*Business Development, Strategy, M&A, Real Estate/Real Estate Investment Experience: Over time, the Company has engaged in a number of strategic dispositions and acquisitions, and an understanding of M&A and other strategic investments (including those involving real estate (given the nature of our business)) will help a director evaluate the opportunities and risks associated with such transactions. |
*Consumer/Hospitality/Gaming Industry Experience: Board members who have an understanding of our core businesses can provide valuable insight into how to continue to build our iconic brands and better engage with our customers and guests around the world. |
*Social, Governance or Diversity; Environmental/Sustainability/Climate Change Experience:Experience in these areas can help support management accountability, transparency and promotion of shareholder interests that are increasingly focused on these important issues.
*Human Capital/Talent Development Experience: Given the competitive nature of our business, experience attracting and retaining top talent can help shape the organization’s culture and assist with oversight of talent development.
*Risk Management/IT Cybersecurity Data Technology Experience: Directors who have experience managing risks associated with cybersecurity and IT functions can help provide knowledge and guidance to the Board with respect to data protection and oversight of associated security risks.
*Finance/Accounting Experience: Directors who have experience with finance and accounting can help evaluate financial management, capital allocation, internal controls and reporting, which helps support risk management.
*Government, Public Policy or Regulatory Affairs/Legal Experience: Our industry is highly regulated, so directors with knowledge and experience with governmental regulations affecting our business can enhance the full Board’s understanding of these matters; legal experience can assist with risk management and evaluation.
The matrix below is intended to capture the competencies of the full Board of Directors, specifically those that relate to skills, experience, expertise and tenure, including the core competencies referred to above.
Skills, Experiences, Expertise, Tenure & Diversity | ||||||||||||||||||
| ||||||||||||||||||
| Bonnie Biumi | Jan Jones Blackhurst | Gary Carano | Frank Fahrenkopf | Don Kornstein | Courtney Mather | Michael Pegram | Thomas Reeg | Dave Tomick | |||||||||
Operational/Executive Leadership/Public Company Leadership |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | |||||||||
Business Development, Strategy, M&A, Real Estate/Real Estate Investment |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | |||||||||
Consumer/Hospitality/Gaming Industry |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | |||||||||||
Social, Governance or Diversity; Environmental/Sustainability/ Climate Change |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | |||||||||
Human Capital/Talent Development; |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | ||||||||||
Risk Management/IT, Cybersecurity, Data Technology |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | |||||||||||
Finance/Accounting | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||||||||
Government, Public Policy or Regulatory Affairs/Legal |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ |
⚫ | ||||||||||||
Years on the Board* | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 | |||||||||
Self-Identified Age | 61 | 74 | 71 | 83 | 71 | 46 | 71 | 51 | 71 | |||||||||
Independent | Y | Y | Y | Y | Y | Y | Y |
* Tenure on our Board reflects the number of years of service on the board of directors of Caesars Entertainment, Inc., the combined company that resulted from the transformative Merger in July of 2020.
13 |
Board Diversity Matrix as of April 17, 2023
In August 2021, the SEC approved a proposal by the Nasdaq Stock Market (the “Nasdaq”) to adopt new listing rules relating to board diversity and disclosure. As approved by the SEC, the new Nasdaq listing rules require all Nasdaq listed companies to disclose consistent, transparent diversity statistics regarding their boards of directors. The rules also require most Nasdaq listed companies to have, or explain why they do not have, at least one diverse director by December 31, 2023. Under the applicable Nasdaq rule, “diverse” includes an individual who self-identifies in one or more of the following categories: female, underrepresented minority or LGBTQ+. In this regard, Ms. Biumi and Ms. Jones Blackhurst both self-identify as female. Accordingly, the Company is in compliance with Nasdaq’s diversity requirement. The Board diversity matrix below presents the Board’s diversity statistics in the format prescribed by the Nasdaq rules.
Total Number of Directors (9)
Female | Male | |||||||
Gender: |
|
|
|
|
|
| ||
Directors | 2 | 7 | ||||||
Demographic Information: |
|
|
|
|
|
| ||
African American or Black |
|
|
|
|
|
| ||
Alaskan Native or Native American |
|
|
|
|
|
| ||
Asian |
|
|
|
|
|
| ||
Hispanic or Latinx | ||||||||
White | 2 | 7 | ||||||
Two or more races or Ethnicities |
|
|
|
|
|
| ||
LGBTQ+ |
|
|
|
|
|
| ||
Did not Disclose Demographic Background |
|
|
|
|
|
|
SHAREHOLDER PROPOSALS FOR THE NEXT MEETING
Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), proposals of shareholders intended for inclusion in the proxy statement for the annual meeting of shareholders to be held in 2024 must be received at our executive offices no later than December 30, 2023. Proponents should submit their proposals by Certified Mail-Return Receipt Requested. Proposals received after that date will be deemed untimely.
To otherwise present a timely proposal or other business for consideration by our shareholders at the annual meeting of shareholders to be held in 2024, pursuant to our current Bylaws (the “Bylaws”), a shareholder’s written notice must be delivered to or mailed and received at our principal executive offices no earlier than the close of business on February 13, 2024 nor later than the close of business on March 14, 2024. In addition, not less than 60 days prior to the date of the next meeting of shareholders called for the election of directors (the “Election Meeting”), a shareholder who intends to make a nomination of a candidate for election as director of the Company at the Election Meeting shall, as required by our Bylaws, deliver to our Secretary a notice setting forth (a) the name, age, business address and the residence address of each nominee proposed in such notice, (b) the principal occupation or employment of such nominee, (c) the number of shares of our capital stock which are beneficially owned by each such nominee and (d) such other information concerning each such nominee as would be required, under the rules of the SEC, in a proxy statement soliciting proxies for the election of such nominees. Such notice shall include a signed consent of each such nominee to serve as a director of the corporation, if elected. This notice requirement does not apply to shareholder proposals properly submitted for inclusion in our proxy statements in accordance with the rules of the SEC and shareholder nominations of director candidates which must comply with the Nominating and Corporate Governance Committee Charter described elsewhere in this Proxy Statement. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 14, 2024. Our Bylaws are posted on the “Governance” page of our website located at https://investor.caesars.com/corporate-governance, under “Other Governance Documents”.
14 | 2023 PROXY STATEMENT |
DIRECTOR INDEPENDENCE
For a director to be considered independent, the director must meet the bright line independence standards under the Nasdaq listing standards and the Board must affirmatively determine that the director has no relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board determines director independence based on an analysis of the independence requirements of the Nasdaq listing standards. In addition, the Board will consider all relevant facts and circumstances in making an independence determination.
Our Board has affirmatively determined that each current director, except Messrs. Gary L. Carano and Reeg, is independent under the Nasdaq listing standards. In determining the independence of directors, the Board considered all commercial, industrial, banking, consulting, legal, accounting, charitable, familial or other business and personal relationships any director may have with us.
Based on the Nasdaq listing standards, Messrs. Gary L. Carano and Reeg are not considered independent because of their current positions as executive officers of the Company.
• | In determining that Mr. Pegram is independent, the Board considered the personal and business relationships that Mr. Pegram has had with the Carano family for over 20 years, including co-ownership of local casinos in Northern Nevada. The Board also considered that the Company’s digital division leases space from one of Mr. Pegram’s casinos to operate a retail sportsbook. The payments made by the Company during 2022 under this lease represented approximately 0.35% of that casino’s gross revenues for 2022. Finally, the Board also considered that Mr. Pegram is an investor in a startup business with Messrs. Reeg and Tomick. The Board affirmatively determined that such relationships would not interfere with Mr. Pegram’s ability to exercise independent judgment in carrying out his responsibilities as a director. |
In determining that Mr. Tomick is independent, the Board considered that Mr. Tomick is an investor in a start up business with Messrs. Reeg and Pegram. The Board affirmatively determined that such relationship would not interfere with his ability to exercise independent judgement in carrying out his responsibilities as a director.
In determining that Ms. Jones Blackhurst is independent, the Board considered Ms. Jones Blackhurst’s role as the Executive Vice President, Public Policy and Corporate Responsibility of Former Caesars from May 2017 through September 2019, and affirmatively determined that such relationship would not interfere with her ability to exercise independent judgment in carrying out her responsibilities as a director.
To effectively support its responsibilities, the Board currently has four committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Corporate Social Responsibility Committee. Each committee is currently comprised solely of independent directors and during 2022 each of our standing committees was comprised solely of independent directors. The Company also has a Compliance Committee, which is discussed in more detail below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is, or in 2022 was, or has previously been, an officer or employee of us or our subsidiaries. In 2022, no member of the Compensation Committee had any direct or indirect material interest in a transaction or a business relationship with us that would require disclosure under the rules of the SEC relating to disclosure of related party transactions. In 2022, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on our Board or the Compensation Committee.
15 |
BOARD STRUCTURE AND RESPONSIBILITIES
BOARD LEADERSHIP STRUCTURE
Mr. Gary L. Carano is Executive Chairman of the Board, Mr. Reeg is our Chief Executive Officer (the “CEO”) and Mr. Anthony L. Carano is our President and Chief Operating Officer (the “COO”). In these roles, Messrs. Reeg and Anthony L. Carano have general charge and management of our affairs, property and business, while Mr. Gary L. Carano provides independent oversight of senior management and Board matters and serves as a valuable bridge between our Board and our management. In addition, the Executive Chairman provides guidance to the CEO, sets the agenda of the Board in consultation with the CEO and Lead Independent Director and presides over meetings of shareholders and the Board.
Mr. Tomick is our Lead Independent Director. He has, in addition to the powers and authorities of any member of the Board, the power and authority to chair executive sessions and to work closely with the Executive Chairman in determining the appropriate schedule for the Board meetings. In his role as Lead Independent Director, Mr. Tomick serves as a liaison between the independent directors, Executive Chairman and CEO and leads the Board’s evaluation of the Executive Chairman and CEO. Mr. Tomick also is responsible for being available for consultation and direct communication with major shareholders and responding directly to shareholder questions, as appropriate. The Lead Independent Director position is at all times held by a director who is “independent” as defined in Nasdaq Rule 5605(a)(2).
Mr. Kornstein is our Vice Chair. In his role as Vice Chair, Mr. Kornstein is tasked with providing an additional layer of independent leadership relating to Board matters, including reviewing and approving meeting agendas and overseeing the quality, quantity and timeliness of information sent to the Board. As part of his Vice Chairman duties, and given his extensive industry experience, Mr. Kornstein provides management and the Board with valuable insights and guidance with respect to strategic initiatives, transaction structuring, governance practices, industry-specific regulatory considerations, tax matters, stakeholder relationships and crisis management oversight, to the extent applicable. This includes being available to provide mission-driven leadership for various financial transactions and operating projects and to provide an enhanced level of input and evaluation with respect to strategic initiatives and other operational matters, as well as providing an independent perspective that is rooted in both industry and tactical business experience. Mr. Kornstein’s deep industry relationships and capital markets knowledge complement his public company board and chief executive experiences and qualify him to serve the Company in several capacities beyond those expected of other independent directors.
The Board believes that this leadership structure is appropriate at this time. Although the roles of CEO and Chairman of the Board are currently separate, the Board does not have a policy regarding the separation of the roles of CEO and Chairman of the Board, as the Board believes it is in our best interests and the best interests of our shareholders to make that determination based on the position and direction of our Company and the composition of the Board. Maintaining a position of Lead Independent Director and an independent Vice Chair provides an extra layer of independent oversight, and we believe this structure facilitates independent oversight of management while fostering effective communication between our management and the Board.
RISK MANAGEMENT & OVERSIGHT
Our Board as a whole oversees risks related to our company and business strategies and operations, exercising this responsibility by considering the risks related to its decision making. Our Board has delegated certain elements of its risk oversight responsibility to its committees to better coordinate with management, and has retained oversight of certain elements of risk where appropriate. The committees report their findings to the full Board on a regular basis. In addition, at its meetings, the Board discusses the risks that we face, including those management has highlighted as the most relevant risks. Furthermore, the Board’s oversight of enterprise risk involves an assessment of the risks inherent in our long-term strategies, as well as other matters brought to the attention of the Board. We believe that the structure and experience of our Board allows our directors to provide effective oversight of risk management.
The Board recognizes that the Board and management are responsible for identifying and attempting to mitigate risks that could cause significant damage to our business or shareholder value. The risks facing us, as outlined in the Risk Factors section of our Annual Report on Form 10-K, include risks associated with our financial position, liquidity, cybersecurity and data privacy, operating performance, ability to meet our debt and master lease obligations and regulations applicable to our operations and compliance therewith.
16 | 2023 PROXY STATEMENT |
Below is a list of the risk management responsibilities of each of our Board committees:
Audit Committee | ||
• Managing risk associated with financial reporting processes, financial statements and internal controls • Managing risks associated with significant financial and accounting policies • Overseeing effectiveness of management’s processes that monitor and manage other key business risks |
Compensation Committee | ||
• Managing risks associated with compensation structure, benefit plans and programs • Monitoring the Company’s compliance with SEC rules and regulations regarding shareholder approval of certain executive compensation matters • Monitoring the relationship between risk management policies and compensation programs and practices • In consultation with the Corporate Social Responsibility Committee, managing risks associated with human capital management oversight |
Nominating and Corporate Governance Committee | ||
• Managing risks associated with corporate governance practices • In consultation with the Board, succession planning for the CEO and key executive officers |
Corporate Social Responsibility Committee | ||
Managing risks associated with: • Climate change • Responsible gaming • Team Member and customer well-being • Maintaining sustainable operations • Diversity, equity and inclusion • Human capital management oversight |
Compliance Committee | ||
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 implements and administers our Compliance Plan. The Compliance Committee’s duties include investigating key team members, vendors of goods and services, sources of financing, consultants, lobbyists and others who wish to do substantial business with us or our subsidiaries and making recommendations to our management concerning suitability. Our Compliance Committee 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), Mr. Anthony L. Carano, Ms. Stephanie Lepori (who serves as the Chief Administrative and Accounting Officer) and Mr. Jeffrey Hendricks (who serves as the Compliance Officer). Mr. Quatmann also serves as an ex-officio member of the Compliance Committee. The Compliance Committee held four meetings in 2022. The Compliance Committee is responsible for overseeing risks associated with our gaming activities and regulatory compliance. |
17 |
CYBERSECURITY OVERSIGHT
The Board is responsible for reviewing our cybersecurity risk profile and is regularly updated by our Senior Vice President of Information Technology (who also serves in the role of Chief Information Security Officer) on cybersecurity risks and threats. The Company has not experienced a material information security breach in the past three years. To manage our cybersecurity risk profile and increase our security posture against emerging threats, we do the following:
We currently follow the National Institute of Standards and Technology’s Cybersecurity Framework for Compliance Controls and are in the process of migrating from a strictly compliance-based framework to a risk-aware maturity framework.
• | We are migrating key portions of our network toward a so-called “Zero Trust” model as defined in National Institute of Standards and Technology Special Publication 207 and (U)ZT_RA_v1.1(U) “Department of Defense (DOD) Zero Trust Reference Architecture”. |
We maintain a robust cybersecurity incident response plan that provides a documented framework for handling high and low severity security incidents and facilitates coordination across multiple parts of the business.
We routinely perform attack and response simulations at the technical level and annually execute tabletop response exercises at the management level.
We utilize external third-party expertise to audit and test our entire cybersecurity program as required by state-specific regulations and best practices.
We maintain a formal information security training program for all team members as well as supplemental training on specific matters such as phishing and email security best practices.
The Board has determined that retaining responsibility for risks related to cybersecurity oversight is appropriate, given the complexity of the risks associated with cybersecurity and the attention required to appropriately review and monitor such risks. The full Board lends its collective experience and attention to discussing and overseeing potential risks identified by management and stays up to date on management’s risk-mitigation processes related to cybersecurity.
EXECUTIVE SESSION AND MEETING ATTENDANCE
Our Corporate Governance Guidelines provide that the independent directors must meet at least twice annually in executive session and that independent directors will have the opportunity to convene in executive session at every meeting of the Board, in their discretion. Our independent directors met during in-person executive sessions, without management present, at four regularly scheduled in-person Board meetings during 2022.
During 2022, our Board held seven meetings and also acted by unanimous written consent seven times. Each incumbent director attended 100% of the Board meetings and meetings of the committees of the Board on which such director served during 2022 and that were held during the period for which he or she served as a director or as member of such committee. In addition to Board and committee meetings, directors are encouraged to attend our annual meeting of shareholders. Messrs. Gary L. Carano, Reeg and Kornstein attended our 2022 annual meeting of shareholders.
BOARD OVERSIGHT
General
Our Board provides the ultimate oversight of the Company and oversees and advises members of management who are responsible for the day-to-day operations and management of the Company. The Board has developed a number of specific expectations of its directors, set forth in the Company’s Corporate Governance Guidelines, to promote the discharge of the Board’s responsibilities and the efficient conduct of the Board’s business.
Management Succession Planning
In consultation with the Board, the Nominating and Corporate Governance Committee periodically reviews and makes recommendations to the Board regarding formal and informal policies and procedures as it deems appropriate regarding succession plans in the event of the retirement, death, incapacity, emergency or other eventuality with respect to the CEO, as well as succession plans for other senior management positions. The Company has a formal CEO and key executive officer succession plan. The plan is evaluated by the Nominating and Corporate Governance Committee from time to time (at least annually) and the Nominating and Corporate Governance Committee provides reports to the Board.
18 | 2023 PROXY STATEMENT |
Code of Ethics and Business Conduct
We have adopted a Code of Ethics and Business Conduct (the “Code”), which includes our Conflicts of Interest Policy, applicable to all directors and team members, including the CEO, Chief Financial Officer (the “CFO”) and Chief Administrative and Accounting Officer. The Code is posted on the “Governance” page of our website located at https://investor.caesars.com/corporate-governance, under “Other Governance Documents”, and a printed copy will be delivered on request by writing to the Corporate Secretary at Caesars Entertainment, Inc. c/o Corporate Secretary, 100 West Liberty Street, 12th Floor, Reno, Nevada 89501. We intend to satisfy the disclosure requirement regarding certain amendments to, or waivers from, provisions of the Code by posting such information on our website.
CORPORATE SOCIAL RESPONSIBILITY
Our Board and executive officers view corporate social responsibility (“CSR”) as an integral element in the way we do business, in the belief that being a good corporate citizen helps protect the Company against risk, contributes to improved performance and helps foster positive relationships with all those with whom we connect. The Board and our executive management are committed to being an industry leader in CSR (which includes diversity, equity and inclusion (“DEI”), social impact and environmental sustainability). In 2022, the Board and our leadership continued to engage with our CEO-level external CSR Advisory Board comprised of experts representing environmental, social and governance (“ESG”), DEI, sustainability and social impact, and used their guidance to confirm our CSR priorities. These priorities are reflected in our 13th annual CSR report, published in 2022 in accordance with Global Reporting Initiative Standards.
CSR Committee of the Board
Led by our Corporate Social Responsibility Committee, our Board oversees the Company’s CSR initiatives.
Code of Commitment
The Company is committed to being a responsible corporate citizen and environmental steward through our CSR strategy, PEOPLE PLANET PLAY. This is reflected in our Code of Commitment which is our public pledge to our guests, Team Members, communities, business partners and all those we reach that we will honor the trust they have placed in us through ethical conduct and integrity. We commit to:
• | PEOPLE: Supporting the wellbeing of our Team Members, guests and local communities. |
• | PLANET: Taking care of the world we all call home. |
• | PLAY: Creating memorable experiences for our guests and leading responsible gaming practices in the industry. |
PEOPLE PLANET PLAY STRATEGY
Our PEOPLE PLANET PLAY strategy defines how we meet the obligations of our Code of Commitment and is aligned with global priorities articulated by the United Nations as the Sustainable Development Goals. PEOPLE PLANET PLAY establishes multi-year targets in key areas of impact, including science-based greenhouse gas (“GHG”) emissions-reduction, formally approved by the Science Based Targets Initiative (“SBTi”), aligning with global best practices on climate change action. In early 2022, we conducted a comprehensive CSR assessment to evaluate our assumptions. We also used the assessment period to review our business transformations following the COVID-19 pandemic, along with expectations related to social justice and CSR. With the help of an external specialist, our assessment gathered input from internal and external stakeholders, reviewed multiple industry and ESG disclosures, standards and frameworks and yielded 21 material topics. This process allowed us to reassess the role our business plays in society, the way we impact people and the environment and the needs of our stakeholders. Our materiality assessment is available on the “ESG Resource Hub” page of our website located at https://investor.caesars.com/esg-hub/esg-resource-hub, under “ESG Disclosures”.
Responsible Gaming and Compliance
For more than thirty years, Caesars has maintained its Responsible Gaming (“RG”) program. We train tens of thousands of Team Members each year and a cadre of RG Ambassadors throughout our properties to identify guests in need of assistance and provide support. In recent years, we have contributed to the National Center for Responsible Gaming, the National Council on Problem Gaming and other state programs to help advance responsible practices in the gaming industry. Our newly expanded digital segment (“Caesars Digital”) also maintains responsible gaming programs tailored to each state in which it operates and offers users in-application RG tools such as time on device restrictions and wagering limits.
We maintain a comprehensive risk-based Bank Secrecy Act (“BSA”) and Anti-Money Laundering (“AML”) program. It includes strong governance and effective internal controls and procedures to comply with applicable
19 |
BSA requirements, regulatory guidance and any related laws, and to take measures to prevent its affiliated casinos from being used for money laundering or other criminal activity. Execution of the program is governed with reference to the Financial Crimes Enforcement Network’s guidance on the Culture of Compliance. Our internal AML Policy, Know Your Customer Policy and BSA Identification Policy outline our AML Program and set the minimum standards for the related procedures and internal controls of our casino affiliates. Team members are required to complete annual trainings related company policies, including AML.
We also maintain the Code, which includes standards designed to deter wrongdoing and to promote, amongst other standards, honest and ethical conduct and full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the SEC. Our Chief Legal Officer serves as the compliance officer of the Code and we provide periodic training regarding the contents and importance of the Code.
We also maintain an Amended and Restated Gaming Compliance Plan (the “GC Plan”), which is approved by various gaming regulators. The GC Plan is designed to implement procedures to enhance the likelihood that no activities of the Company or any affiliate of the Company will impugn our reputation and integrity. The GC Plan also establishes a Compliance Committee that assists the Company in implementing its strict policy that its business be conducted with honesty and integrity, and in accordance with high moral, legal and ethical standards. Our Senior Vice President & Assistant General Counsel – Regulatory & Compliance serves as the Compliance Officer as defined by the GC Plan.
Environmental Stewardship
We take a proactive approach to environmental sustainability through our CodeGreen strategy established by Former Caesars in 2007, striving to improve our performance across energy and GHG emissions efficiencies, reduction of water consumption and increasing diversion of waste from landfills. The Company recognizes the impact climate change can play both on our business and the guests we serve. Identifying, assessing and managing the risks and opportunities therefore plays a vital role in our long-term strategic thinking on climate and water, and how we approach our CSR goals. Former Caesars adopted Science Based Targets (“SBTs”) as part of its strategy to reduce environmental impact. These targets, approved to be in line with well below 2 degrees Celsius per SBTi, are (i) reducing absolute Scope 1 and 2 GHG emissions by 35% by 2025, and 100% by 2050, from a 2011 base-year and (ii) having 60% of suppliers by spend institute science-based GHG reduction targets for their operations by 2023. In 2023, we expect to establish a new baseline to reaffirm GHG emission reduction goals as a combined company, while increasing our ambition to meet a 1.5-degree reduction target. We modeled our GHG emissions data to create an estimate for 2018 and prior years back to 2011. This enabled us to compare our progress against our SBTs using actual data against a modeled 2011 base year. Between 2011 and 2021, Caesars estimated a reduction in absolute Scopes 1 and 2 GHG emissions of 33.9%. Caesars is pursuing renewable energy sources and low-carbon options, including on site solar developments. Our long-term goals include a continued focus on energy efficiency and conservation as well as evaluating renewable energy supply opportunities for each of our properties in pursuit of our forthcoming SBTs.
We voluntarily participate in the CDP (formerly the Carbon Disclosure Project), an international nonprofit that runs a global disclosure system for investors, companies and regions to manage their environmental impacts. In 2022, Caesars achieved A-List status for both climate change and water security and in 2021 earned a spot on the Supplier Engagement Leaderboard from CDP. Less than 3% of companies assessed by CDP in 2022 made the A List for either climate change or water security.
We are engaged in extensive waste reduction efforts across our facilities, including recycling, food donation and manure composting. In 2021, we diverted 40% of our total waste from landfills.
Community Investment
We contribute to our local communities to help them develop and prosper through funding community projects, Team Member volunteering and cash donations from the Caesars Foundation, a private foundation funded from our operating income. In 2022, the Caesars Foundation contributed $3.3 million to communities across the United States. The Caesars Foundation also continued to support significant national relationships that support DEI. During 2022, our Team Members volunteered over 75,000 hours through the HERO program.
Many of our community partners are long-term collaborations. For example, in 2022 we celebrated the 20th anniversary of our partnership with Meals on Wheels America working together to combat the issues of senior hunger and isolation. We also implemented an expanded partnership with Boys and Girls Club of America supported by a $500,000 grant from the Caesars Foundation to support the mission of enabling young people to reach their full potential as productive, caring, responsible citizens.
20 | 2023 PROXY STATEMENT |
We seek to encourage DEI dialogue in our communities as part of our advocacy approach to raise awareness. In 2022, we hosted a DEI Summit bringing together corporate and nonprofit partners and suppliers in supporting and promoting efforts to advance DEI initiatives. The Summit included several educational sessions, keynotes and panel discussions led by notable DEI leaders and practitioners, as well as a panel discussion involving diverse suppliers.
Diversity, Equity and Inclusion
We embrace diversity and aim to create an inclusive working environment that celebrates all our Team Members as individuals. Our DEI framework identifies five pillars of activity—advocacy, Team Members, suppliers, communities and guests—for a holistic approach to embedding DEI in everything we do. We publish our DEI data in our annual CSR report (described below).
We set targets to increase the representation of women and people of color in leadership roles (supervisory and above). Our 2025 goals outlined 50% of management roles to be held by women in both the mid-level and senior leadership populations, and 50% of leadership roles to be held by people of color. We also committed to increase the representation of people of color in senior leadership roles by 50%. As of December 31, 2022, 45% of mid-level roles and 30% of senior leadership roles in the Company are held by women. Additionally, 43% of leadership roles are held by people of color and the representation of people of color in senior leadership positions has increased by 106%.
Team Member Engagement, Compensation, Benefits, Development, Safety and Wellbeing
We strive to inspire our Team Members through our mission, vision and values, and our Code of Commitment (described below). To evaluate our Team Member experience and our retention efforts, we monitor a number of Team Member measures, such as turnover rates and Team Member satisfaction. In 2021, we implemented new Team Member experience surveys to help us further understand the drivers of engagement and areas where we can improve. These surveys are completed on a regular basis alongside additional surveys targeted at specific events within a Team Member cycle, including new hires, anniversary milestones and exit inquiries.
Our compensation and benefits programs are designed to attract, retain and motivate our Team Members. In addition to competitive salaries and wages, we provide a variety of short-term, long-term and incentive-based compensation programs to reward performance relative to key metrics relevant to our business. We offer comprehensive benefit options including, but not limited to, retirement savings plans, health insurance coverage (including medical, mental health, dental, vision and pharmacy), parental leave, educational assistance, training opportunities, company-paid life insurance and an employee assistance program.
We place utmost importance on creating a safe workplace for our Team Members, embedding procedures so that all our Team Members have the awareness, knowledge and tools to make safe working a habit.
We also maintain a wellness program to help our Team Members improve their health and wellbeing. This program has demonstrated improved health metrics for participating Team Members and their covered family members helping reduce the cost of healthcare for Team Members and for the Company. In 2022, we consolidated our group health plans and made significant enhancements to our offerings and wellness program including a wide range of affordable options, mental health initiatives and expanded onsite and virtual primary care clinics across the US.
CORPORATE GOVERNANCE GUIDELINES
The matters discussed above reflect the Board’s commitment to a system of governance that enhances corporate responsibility and accountability. The Corporate Governance Guidelines contain provisions addressing the following matters, among others:
Board size;
Director qualifications and membership criteria;
Director independence;
Director responsibilities;
Board meetings and attendance and participation at those meetings;
Board committees;
Executive sessions;
21 |
Director orientation, training and continuing education;
Director compensation;
Performance evaluation of the Board and its committees; and
Public interactions.
Learn more about our governance practices, procedures and philosophies by visiting the “Governance” page of our website located at https://investor.caesars.com/corporate-governance, where you will find our Corporate Governance Guidelines, committee charters and other important governance documents. We intend to disclose any future amendments to the Corporate Governance Guidelines on our website.
COMMITTEES OF THE BOARD
Shortly following the Merger, the Board’s standing committees were re-constituted because of the change in Board membership effectuated by the Merger, and the Board elected a new independent chair of the Compensation Committee. In addition, the Board formed a new Corporate Social Responsibility Committee as a standing committee of the Board and elected an independent chair to that committee. The Board has determined that each committee member is independent as defined in the Nasdaq listing standards. The Board has adopted a written charter for each of these committees. The charter for each of these committees is available on the “Governance” page of our website located at https://investor.caesars.com/corporate-governance, under “Committee Charters”.
The chart below reflects the composition of the standing committees of our Board as of the date of this Proxy Statement:
NAME | AUDIT | COMPENSATION | CORPORATE SOCIAL RESPONSIBILITY | NOMINATING AND CORPORATE GOVERNANCE | ||||
Bonnie S. Biumi | • | |||||||
Jan Jones Blackhurst | Chair | |||||||
Frank J. Fahrenkopf | Chair | |||||||
Don R. Kornstein | Chair | • | • | |||||
Courtney R. Mather | • | • | • | |||||
Michael E. Pegram | • | |||||||
David P. Tomick | Chair | • |
22 | 2023 PROXY STATEMENT |
Audit Committee
4 MEETINGSIN2022 In addition to formal meetings, the Audit Committee acted by unanimous written consent on one occasion during 2022. | ||||
MEMBERS Biumi Mather Tomick (Chair) | INDEPENDENCE Ms. Biumi and Messrs. Mather and Tomick are independent as independence is defined under the Nasdaq listing standards. AUDIT COMMITTEE FINANCIAL EXPERT Our Board has determined that Ms. Biumi and Messrs. Tomick and Mather each qualify as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K. | |||
| ||||
|
|
The purpose of the Audit Committee is to oversee our corporate accounting and financial reporting processes and the audits of our financial statements; provide an avenue of communication among our independent auditors, management, our internal auditors and our Board; and prepare the Audit Committee Report required by the SEC to be included in our annual proxy statement or annual report on Form 10-K. The principal duties and responsibilities of our Audit Committee are to oversee and monitor the following:
• Preparation of the annual Audit Committee Report to be included in our annual proxy statement;
• Our financial reporting process and internal control system;
• The integrity of our financial statements;
• The independence, qualifications and performance of our independent auditor;
• The performance of our internal audit function;
• Our compliance with legal, ethical and regulatory matters; and
• Risks that may have a material impact on the financial statements or the Company’s policies and procedures and internal controls.
The Audit Committee investigates any matter brought to its attention within the scope of its duties. It also has the authority to retain counsel and advisors to fulfill its responsibilities and duties.
23 |
Compensation Committee
4 MEETINGSIN2022
In addition to formal meetings, the Compensation Committee acted by unanimous written consent on two occasions during 2022.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MEMBERS | INDEPENDENCE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mather Pegram | Messrs. Kornstein, Mather and Pegram are independent as independence is defined under the Nasdaq listing standards. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Compensation Committee is responsible for designing, approving and evaluating the administration of our compensation plans, policies and programs.
The Compensation Committee makes recommendations (and, where appropriate, makes determinations) with respect to salaries, bonuses, equity awards and deferred compensation plans for our named executive officers (the “NEOs”) as well as the policies underlying the methods by which we compensate our executives. The Compensation Committee may form and delegate authority to subcommittees and may delegate authority to one or more designated Compensation Committee members to perform certain of its duties on its behalf, including, to the extent permitted by applicable law, the delegation to a subcommittee of one director the authority to grant stock options and equity awards. The Compensation Committee reviews the recommendations of our CEO with respect to individual elements of the total compensation of our executive officers (other than the CEO) and key management. The Compensation Committee delegated authority to Mr. Reeg to grant equity awards to team members who are not executive officers or officers subject to Section 16(a) of the Exchange Act in an aggregate amount not to exceed $10,000,000 (based on fair market value as of the grant date) for the 2022 calendar year.
Corporate Social Responsibility Committee
|
The purpose of the Corporate Social Responsibility Committee is to assist the Board in fulfilling its responsibilities related to oversight of the Company’s sustainability risks and opportunities and The principal duties and responsibilities of the Corporate Social Responsibility Committee are as follows:
• Define and oversee the company’s business purpose, value or mission statements, strategies, policies, and goals related to environmental sustainability, responsible gaming, and DEI topics;
• Create programs to develop the collective knowledge, skills, and experience of Board
• Review the company’s annual
• Oversee the Company’s efforts to proactively promote DEI, and intentionally combat unconscious bias and promote conscious inclusion within all levels of the company. |
Nominating and Corporate Governance Committee
ELEMENTS OF EXECUTIVE COMPENSATION AND BENEFITS FOR 2022
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 annual study 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.
The NEOs’ base salary levels are set forth in the table below.
EXECUTIVE NAME | BASE SALARY AS OF DECEMBER 31, 2022 | BASE SALARY AS OF DECEMBER 31, 2021 | % Change | |||||||||
Thomas R. Reeg | $ | 2,000,000 | $ | 2,000,000 | —% | |||||||
Bret Yunker (1) | $ | 1,150,000 | $ | 1,000,000 | 15.0% | |||||||
Anthony L. Carano (1) | $ | 1,350,000 | $ | 1,300,000 | 3.8% | |||||||
Edmund L. Quatmann, Jr. (1) | $ | 775,000 | $ | 750,000 | 3.3% | |||||||
Stephanie Lepori (1) | $ | 700,000 | $ | 650,000 | 7.7% |
(1) |
|
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 upside/downside reward potential. Annual incentive awards have historically been based on achievement of Adjusted EBITDA. Performance targets are set by the Compensation Committee annually at the start of the applicable fiscal year. Adjusted EBITDA was established as the sole performance metric for 2022 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.
The Compensation Committee approved the following target bonus opportunities for the 2022 calendar year:
|
With respect to the Adjusted EBITDA financial metric, performance levels for threshold and maximum bonus opportunities were established at the beginning of 2022 at 90% and 115%, respectively, of target level. At 90% achievement, 50% of the target award is earned, at 100% achievement, 100% of the target award is earned, and at 115% achievement and above, 200% of the target award is earned, subject to linear interpolation between points.
36 | 2023 PROXY STATEMENT |
The following table sets forth the threshold, target, and maximum levels established under the 2022 annual incentive plan at the beginning of 2022, based on the budget for 2022, and the levels actually achieved based on performance:
PERFORMANCE LEVEL | PERFORMANCE REQUIREMENT | CONSOLIDATED ADJUSTED EBITDA (TARGETS) (‘000’S) | ||||
Threshold | 90% of | $ | 3,503,700 | |||
Target | 100% of target goal | $ | 3,893,000 | |||
Maximum | 115% of target goal | $ | 4,476,950 |
Dollars in (000’s) | Threshold—90% | Target—100% | Maximum—115% | 2022 Actual Adjusted EBITDA and Payout* | ||||||||||||
Adjusted EBITDA | $3,503,700 | $3,893,000 | $4,476,950 | $3,952,900 | ||||||||||||
Payout as a % of Target | 50% | 100% | 200% | 110% |
* | See below for a discussion of the
|
EXECUTIVE NAME | ANNUAL BONUS EARNED FOR 2022 | ANNUAL BONUS EARNED FOR 2022 AS % OF TARGET | ||||||
Thomas R. Reeg | $ | 4,400,000 | 110% | |||||
Bret Yunker | $ | 1,581,250 | 110% | |||||
Anthony L. Carano | $ | 1,856,250 | 110% | |||||
Edmund L. Quatmann, Jr. | $ | 852,500 | 110% | |||||
Stephanie Lepori | $ | 770,000 | 110% |
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, 2022” on pages 45—46 of our 2022 Annual Report on Form 10-K. For purposes of determining targets for bonus opportunities and achievement of such targets for 2022, consolidated Adjusted EBITDA was calculated as described in our Form 10-K for the year ended December 31, 2022, as further adjusted by the Compensation Committee in its discretion to exclude the impact of certain segments and rent paid under our Rio lease. In determining targets for bonus opportunities and achievements of such targets for future periods, the Compensation Committee may make different or additional adjustments to the calculation of consolidated Adjusted EBITDA.
Incremental 2022 Performance Bonus
The continued impact of COVID-19 on the Company’ operations in early 2022 (the original Omicron wave that began in late 2021) resulted in softer than projected results to begin the year. The timely response of all our team members was vital in suppressing the negative impact to the quarterly operations of our Las Vegas and Regional segments. As a result of the efforts of our team members, despite the continued impact of COVID-19, the Company delivered strong results for the remainder of the year, which included certain record setting quarterly results within our Las Vegas and Regional segments.
Mr. Reeg and the senior management team took into consideration the Company-wide efforts in response to the continued impact of COVID-19 when evaluating the Company’s performance relative to the Adjusted EBITDA targets established for non-executive team members. In addition, Mr. Reeg requested that the Compensation Committee similarly take into consideration the efforts, leadership and performance of the executive officers in facing various challenges during 2022. The Compensation Committee evaluated Mr. Reeg’s request and, in November 2022, agreed to award an incremental performance bonus to Messrs. Anthony L. Carano ($286,875), Yunker ($244,375) and Quatmann ($131,750) and Ms. Lepori ($119,000). Mr. Reeg and Mr. Gary L. Carano were not included in this incremental performance bonus. The amounts were determined for each executive based on the estimated continued impact of COVID-19 on the Company’s operations in early 2022.
| 37 |
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.
2022 Equity Mix
As in past years, for LTI awards made to executive officers during 2022, the equity compensation mix was 50% RSUs and 50% PSUs. For 2022, 35% of the PSUs were based on Adjusted EBITDA achievement over three years, and 65% were based on three-year total shareholder return ranking against the S&P 500. In addition to the regular annual LTI award, Mr. Reeg received a special one-time grant of MSUs during 2022, which was 100% performance-based.
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 2022.
Each NEO’s target grant date LTI award opportunity for 2022 (as a percentage of base salary) is set forth in the table below:
EXECUTIVE NAME | 2022 LTI AWARD TARGET OPPORTUNITY (AS A % OF BASE SALARY) | 2021 LTI AWARD TARGET OPPORTUNITY (AS A % OF BASE SALARY) | ||||||
Thomas R. Reeg (1) | 450% | 350% | ||||||
Bret Yunker (1) | 300% | 200% | ||||||
Anthony L. Carano (1) | 300% | 200% | ||||||
Edmund L. Quatmann, Jr. (1) | 200% | 150% | ||||||
Stephanie Lepori (1) | 200% | 100% |
(1) | Increases were based on
|
For Mr. Reeg, the LTI award target opportunity shown above does not include his special one-time MSU grant made during 2022, which was 100% performance-based.
2022 ANNUAL PSU GRANT
As noted above, for 2022, 35% of the PSUs were based on Adjusted EBITDA achievement, and 65% were based on rTSR, each as measured over a 3-year period.
Relative Total Shareholder Return
The portion of the 2022 annual LTI awards that is based on rTSR is intended to motivate our senior management team to maximize the wealth accumulation of our shareholders by outperforming the S&P 500. rTSR is critical because it ties executive officer compensation to the shareholder experience and the creation of shareholder value, and it aligns the interests of executive officers with those of the Company and its shareholders. By measuring our stock performance relative to an index, it mitigates the impact of macroeconomic factors, both positive and negative, that affect the industry and/or stock price performance and are beyond the control of management, and it provides rewards that are more directly aligned with performance through different economic cycles.
The performance and payout slopes for the rTSR portion of the 2022 LTI awards are as follows:
EXECUTIVENAME | BASE SALARY EFFECTIVE JANUARY 2020 | BASESALARY AFTER REDUCTION EFFECTIVE APRIL 11, 2020 | BASE SALARY EFFECTIVE JULY 2020 (POST-MERGER) | |||||||||
Mr. G. Carano | $ | 1,177,000 | $ | 823,900 | $ | 1,400,000 | ||||||
Mr. Reeg | $ | 1,712,000 | $ | 1,198,400 | $ | 2,000,000 | ||||||
Mr. Yunker | $ | 802,500 | $ | 561,750 | $ | 1,000,000 | ||||||
Mr. A. Carano | $ | 1,070,000 | $ | 749,000 | $ | 1,300,000 | ||||||
Ms. Lepori | $ | 432,600 | $ | 346,080 | $ | 650,000 |
• |
|