Thomas R. Reeg
Caesars EntertainmentAbout Thomas R. Reeg
Thomas R. Reeg is Chief Executive Officer of Caesars Entertainment (CZR) and a director since July 2020; he has been CEO since January 2019, previously serving as President (2014–2018) and CFO (2016–2019) at Eldorado/Caesars following earlier roles in high-yield portfolio management at AIG and credit research at Bank One covering gaming/lodging sectors . Age: 53 . 2024 operating scorecard: Net Revenues $11.2B vs. $11.5B in 2023; Adjusted EBITDA down 5.1% YoY; Digital segment revenue/margin improved; balance sheet de-risking via $2.9B term loan and $1.5B notes, extending maturities to 2027; asset sales (WSOP $500M, LINQ Promenade $275M) reduced debt . On long-term equity, 2022 PSUs paid 71.7% overall; the 2022 three-year rTSR ranked ~3rd percentile (below threshold) but was certified at 61.5% to recognize strategic execution; the 2022 stock-price hurdle award paid 0 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Caesars/Eldorado | Chief Executive Officer; Director | CEO since Jan 2019; Director since Jul 2020 | Led integration/portfolio optimization; deleveraging and refinancing; Digital expansion |
| Eldorado Resorts | President; CFO; SVP Strategic Development | President 2014–2018; CFO 2016–2019; SVP 2011–2014 | Led M&A/scale-up phase pre-Caesars merger |
| AIG Global Investment Group | Managing Director & Portfolio Manager (High Yield) | 2002–2005 | Co-managed HY mutual fund portfolios |
| Bank One Capital Markets | Senior High-Yield Research Analyst | Pre-2002 | Covered casino, lodging and leisure sectors—deep domain expertise |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Recreational Enterprises, Inc. (REI) | Vice President; Director | Current | REI is a <5% CZR shareholder; Reeg disclaims beneficial ownership of REI’s CZR shares |
| Autocam Corporation | Director | 2007–2010 | Prior public board experience |
| NGA HoldCo, LLC | Board of Managers | 2007–2011 | Prior investment vehicle board |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 2,000,000 | 2,000,000 | 2,000,000 |
| Target Annual Bonus (% of salary) | 200% | 200% | 200% |
| LTI Target (% of salary) | 450% (CEO prior policy) | 450% | 475% |
Notes:
- 2024 LTI mix: 50% RSUs (3-yr ratable vest) and 50% PSUs (80% rTSR vs S&P 500; 20% Adjusted EBITDA; 3-year) .
- 2024 contract renewal RSUs: 70,126, vest in three equal installments on each of the first three anniversaries of Jan 1, 2024 .
Performance Compensation
- Annual Incentive (STI) structure and 2024 outcome:
- Metric: Consolidated Adjusted EBITDA; threshold 90% pays 50%; target 100% pays 100%; max 115% pays 200% .
- 2024 Actual: 92.3% of target; payout 61.5% of target; CEO bonus earned $2,460,000 .
| 2024 STI (Adjusted EBITDA) | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|
| Performance requirement | 90% of target | 100% | 115% | 92.3% |
| Consolidated Adj. EBITDA ($000s) | 3,645,000 | 4,050,000 | 4,657,500 | 3,739,000 |
| Payout (% of target) | 50.0% | 100.0% | 200.0% | 61.5% |
- Long-Term Incentive (LTI) design and context:
- 2024 PSUs: 80% rTSR vs S&P 500 and 20% Adjusted EBITDA; payout curve: 35th pct=50%, 50th=100%, 75th=200%; negative TSR cap at 100% .
- 2022 PSU vesting: averaged 98.1% vs EBITDA targets (payout 90.5%) and rTSR ranked 3rd percentile (below threshold) but certified at 61.5% recognizing strategic actions; overall 71.7% payout .
- 2022 CEO Hurdle Award: performance RSUs with $125/$150/$175 stock price hurdles—no vesting; value zero at Feb 2025 end .
- 2025 change: remove EBITDA from PSUs; new mix 50% RSUs, 50% PSUs with 60% free cash flow (annual targets, 0–160% payout) and 40% rTSR vs industry peer set .
| 2024 LTI Grant Detail (Target Values) | RSU Target ($) | PSU Target ($) | PSU Metrics/Weights | Vesting |
|---|---|---|---|---|
| CEO (475% of salary) | 4,750,000 | 4,750,000 | rTSR 80%, Adj. EBITDA 20% | RSUs vest ratably over 3 years; PSUs over 3-year performance then service vesting as applicable |
Multi‑Year Summary Compensation (Total Reported)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 2,000,000 | 2,000,000 | 2,000,000 |
| Stock Awards (RSUs/PSUs grant-date fair value) | 24,616,624 | 12,161,765 | 13,535,975 |
| Non‑Equity Incentive (STI) | 4,400,000 | 4,112,000 | 2,460,000 |
| All Other Compensation | 333,296 | 336,594 | 375,959 |
| Total | 31,349,920 | 18,610,359 | 18,371,934 |
Perquisites detail (2024): Personal aircraft incremental cost $297,221; residential security $60,184; other insured benefits and 401(k) match included .
Equity Ownership & Alignment
- Stock ownership policy: CEO must hold 5x base salary; all NEOs met guidelines as of 12/31/24 .
- Beneficial ownership (Record Date 4/14/2025): 554,375 CZR shares (<1%); comprised of 307,716 via family LLC, 240,419 in a revocable trust, and 6,240 in 401(k) .
- Pledging/hedging: Hedging prohibited by policy; no pledge disclosed for Mr. Reeg; pledges disclosed for other insiders (e.g., Caranos) in footnotes .
- Potential selling pressure (vesting overhang):
- Time‑based RSUs: 103,916 from 1/26/2024 grant outstanding at 12/31/24 (3‑yr ratable vest) .
- Contract Renewal RSUs: 70,126, vest 1/1/2025–1/1/2027 in equal thirds .
- PSUs: multiple unearned tranches outstanding at 12/31/24 (e.g., rTSR and EBITDA PSUs; the 2022 hurdle tranches 50k/75k/100k subsequently forfeited in Feb 2025) .
| Outstanding Equity (as of 12/31/2024) | Units (#) | Status/Type |
|---|---|---|
| RSUs (various 2021–2023 grants) | 17,522; 17,077; 17,972 | Unvested RSUs |
| 2022 Hurdle Award tranches | 50,000; 75,000; 100,000 | Unearned at 12/31/24; forfeited 2/2025 |
| 2023–2024 PSUs (examples) | 31,732; 30,072; 41,566; 18,081 | Unearned PSUs (rTSR/EBITDA) |
| 2024 Annual RSUs | 103,916 | Time‑based RSUs (3‑yr) |
| 2024 Contract Renewal RSUs | 70,126 | Time‑based RSUs (3‑yr) |
Employment Terms
- Contract term: Amended and restated effective Jan 1, 2024; runs to Jan 1, 2027 with automatic one‑year renewals; change‑in‑control (CIC) extends term two years from CIC date .
- Severance (no‑cause or good reason): 1.0x (base + target bonus), pro‑rated actual bonus, 12 months health, 12 months outplacement (≤$10k) .
- CIC double trigger: 2.99x (base + target bonus), pro‑rated target bonus, 24 months health, 12 months outplacement (≤$10k) .
- Potential payouts table (as of 12/31/2024 scenario): Cash severance $8.46M no‑cause/good‑reason; $21.94M post‑CIC; equity acceleration values as disclosed; benefits continuation amounts itemized .
Board Governance & Service
- Role: Director since July 2020; management director; not independent under Nasdaq due to executive status .
- Committees: None .
- Board structure: Executive Chairman (Gary L. Carano); CEO (Reeg); independent Lead Director (David P. Tomick); Vice Chair (Don R. Kornstein). Each standing committee comprised solely of independent directors .
- Attendance/executive sessions: 100% attendance by incumbents in 2024; independent directors met in executive sessions at each of four in‑person meetings .
- Director compensation: Employee directors (incl. CEO) receive no board fees; non‑employee program includes $100k cash retainer, committee fees, and $250k equity grant for 2024 .
- Dual‑role/independence notes: Board disclosed Reeg and certain directors invested together in a start‑up (disclosed and assessed for independence); Reeg and Executive Chairman also serve as officers/directors of REI (a <5% shareholder) without REI comp committee .
Compensation Committee Analysis
- Committee: Independent directors (Kornstein—Chair; Mather; Pegram) .
- Consultant: Aon engaged; $150k in 2024 for executive comp advisory; separate corporate services ($4.7M) assessed; committee determined independence and no conflicts .
- Peer group used for pay benchmarking (unchanged 2024): Boyd, Carnival, Hilton, Hyatt, Las Vegas Sands, Marriott, MGM, Norwegian, Penn Entertainment, Royal Caribbean, Wynn .
- Say‑on‑pay: 82% approval at 2024 annual meeting; in response to feedback, 2025 PSUs replaced EBITDA with free cash flow to reduce metric overlap .
Related‑Party and Risk Indicators
- Related‑party: Company leases space from casinos owned by director Pegram (Board determined immaterial to his independence); Reeg joint start‑up investment disclosed with Pegram and Tomick .
- Clawback and trading policies: Dodd‑Frank compliant clawback; strict insider‑trading and anti‑hedging policies; equity grant timing controls .
- Perquisites optics: CEO personal aircraft use incremental cost $297,221 (2024); residential security program instituted for executives .
Investment Implications
- Pay alignment: High at‑risk mix (approx. 87% for CEO) with multi‑year PSU structure tied primarily to rTSR (and now FCF) links outcomes to shareholder returns and cash generation; the zero‑paying 2022 hurdle award and below‑target 2024 STI underscore rigor, though the discretionary 61.5% rTSR certification for 2022 introduces some subjectivity .
- Overhang/flow: Material RSU vests from 2024 annual (103,916) and contract renewal (70,126) awards over 2025–2027 could create periodic selling pressure; absence of disclosed pledging by Reeg reduces alignment risk relative to certain peers/insiders .
- Retention/CIC: Moderate severance (1.0x) and market CIC multiple (2.99x) with double trigger and healthcare/outplacement support; auto‑renewing term to 2027 enhances retention but limits turnover option value without cost .
- Execution track: 2024 fundamentals softened (EBITDA −5.1%), but debt maturity extension and asset sales improved resilience; Digital momentum is a positive lever under Reeg’s oversight; LTI pivot to FCF in 2025 better aligns with deleveraging/owner priorities .
Overall: Reeg’s package is heavily performance‑weighted with clear vesting schedules and robust ownership requirements. Watch rTSR/FCF PSU attainment versus revised metrics, quarterly RSU vest cadence (liquidity), and any further discretionary adjustments to PSU outcomes. A clean pledging profile and strict hedging prohibition support alignment, while related‑party disclosures are acknowledged and monitored by the Board .