Daniel R. Lee
FULL HOUSE RESORTSAbout Daniel R. Lee
Daniel R. Lee (age 68) is Director, President and CEO of Full House Resorts (FLL), serving since November 2014, with an MBA and a BS in Hotel Administration from Cornell University . Under his tenure, 2024 revenue rose 21.2% year over year to $292.1 million, while Adjusted EBITDA was roughly flat at $48.6 million; the company reported a net loss of $40.7 million in 2024 . Management disclosed that revenues in 2024 were up 141% versus 2014, and that from November 28, 2014 through March 31, 2025, the stock price increased approximately 234% .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Full House Resorts | President & CEO; Director | Nov 2014–present | Led openings of American Place (temporary) and Chamonix; diversified revenue base . |
| Creative Casinos, LLC | Managing Partner | 2010–2014 | Casino resort development experience . |
| Pinnacle Entertainment | Chairman & CEO | 2002–2009 | Large public casino operator leadership . |
| Mirage Resorts | CFO, Treasurer, SVP Finance & Development | 1990s | Finance and development leadership at major operator . |
| Drexel Burnham Lambert; CS First Boston | Securities analyst (lodging/gaming) | 1980s | Industry analyst background; former CFA . |
External Roles
| Organization | Role | Years | Committees/Notes |
|---|---|---|---|
| Associated Capital Group, Inc. (public) | Independent Director | Since Nov 2015 | Member, governance committee . |
| Myers Industries, Inc. (public) | Independent Director | 2016–2018 | Member, audit; nominating/governance committees . |
| LICT Corporation; ICTC Group, Inc. | Independent Director | Prior service | Noted prior independent directorships . |
Fixed Compensation
| Year | Base salary ($) | Bonus ($) | All other comp ($) | Notes |
|---|---|---|---|---|
| 2024 | 600,000 | 240,000 | 46,753 | Bonus reflects “individual qualitative goals”; life/disability $22,117; health $17,737; 401(k) match $6,900 . |
| 2023 | 600,000 | — | 48,008 | No bonus; similar benefit structure . |
Employment Agreement provides base salary of $600,000, effective Dec 31, 2020 through Dec 31, 2025; company endeavors to pay CEO at ~50th percentile of peer group .
Performance Compensation
- Annual Incentive Plan structure (NEOs): two metrics for 2024 — Adjusted EBITDA and individual qualitative goals; total annual payout capped at 175% of base salary (CEO), 125% (CFO), 100% (COO) .
- 2024 Adjusted EBITDA metric scale (as % of base salary): CEO threshold 25%, target 80%, max 175%; CFO/COO threshold 25%, target 75%, max 125%/100% .
- 2024 qualitative goals metric scale (as % of base salary): CEO threshold 10%, target 40%, max 40%; CFO threshold 10%, target 20%, max 30%; COO threshold 10%, target 20%, max 30% .
- Actual 2024 performance: Adjusted EBITDA was $48.6 million vs threshold of $50 million — zero payout on the EBITDA metric; the committee approved maximum qualitative payouts for Mr. Lee (40%) and Mr. Fanger (30%); no qualitative payout for Mr. Ferrucci .
| Metric (2024) | Threshold | Target | Maximum | 2024 Actual | Payout (CEO) |
|---|---|---|---|---|---|
| Adjusted EBITDA ($mm) | 50 | 70 | 80 | 48.6 | 0% (below threshold) . |
| Individual qualitative goals (as % of salary) | 10% | 40% | 40% | Committee-approved maximum | 40% of base salary ($240,000) . |
Equity awards (structure and vesting):
- Options: Jan 2, 2024 grant for 87,822 shares at $5.15; vests 1/3 on each anniversary of Jan 2, 2024. Jan 2, 2025 grant for 97,267 shares at $4.62; vests 1/3 on each anniversary of Jan 2, 2025 .
- Performance shares (PSUs): 58,252 granted Jan 2, 2024; vesting based on CAGR of Adjusted EBITDA and Free Cash Flow Per Share over 2024–2026; 64,935 granted Jan 2, 2025 with performance periods 2025–2027 .
- PSU cancellations: In March 2025, 142,555 performance shares were cancelled for not meeting 2024 financial hurdles, including 41,391 shares for Mr. Lee .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 2,056,276 shares (5.6% of outstanding as of Mar 18, 2025) . |
| Composition | 984,618 owned directly; 777,052 options currently exercisable; 132,945 in a subtrust for children; 145,735 in a family trust for children; 15,926 in UTMA account — Mr. Lee has sole voting/dispositive power over these shares . |
| Vesting overhang | Options vesting from 2024 and 2025 grants at 1/3 per year on each Jan 2 anniversary (2025–2027/2026–2028) . |
| Outstanding equity awards at 12/31/2024 | Notable option tranches (exercisable): 100,000 @ $1.70 (exp 2026); 240,000 @ $2.32 (exp 2027); 100,000 @ $1.97 (exp 2029); 100,000 @ $1.73 (exp 2030); 124,120 @ $3.93 (exp 2031). Partially unexercisable: 13,980 @ $11.82 (exp 2032); 41,719 @ $7.40 (exp 2033); 87,822 @ $5.15 (exp 2034). Unvested performance shares: 58,252 (market value $237,668 at 12/31/2024) . |
| Hedging/pledging | Company policy prohibits hedging, pledging, short sales, and derivative transactions in company stock . |
| Ownership guidelines | CEO 5x salary; all NEOs and directors exceeded minimums as of the record date except Ms. Handler (expected to comply by May 2025) and Mr. Ferrucci (retiring April 11, 2025) . |
Employment Terms
| Term | Detail |
|---|---|
| Agreement | CEO Employment Agreement effective Dec 31, 2020; expires Dec 31, 2025 . |
| Base salary | $600,000; target/other bonuses per agreement (Annual Bonuses and Specific Milestone Bonuses) . |
| Benefits | Company-paid life and long-term disability insurance, each covering $600,000; participation in customary health, welfare, fringe benefit plans . |
| Severance (without cause / good reason) | One year’s base salary + target bonus, paid in installments; pro rata bonus for year of termination (paid after filing 10-K); continued health, life and disability coverage per contract; full accelerated vesting of all outstanding stock options . |
| Death/Disability | One year’s salary paid monthly; pro rata bonus; in Lee’s case, vested options remain exercisable; unvested portions terminate . |
| Change in control | CIC definition includes >50% voting power change, majority board turnover in ≤12 months via contested elections, sale of substantially all assets, merger where pre-CIC holders own ≤50% of survivor, or dissolution/liquidation . |
| Restrictive covenants | Confidentiality, non-solicitation, non-hire, and non-competition provisions . |
Board Governance
- Role and service: Director since November 2014; serves on the Compliance Committee (not independent) .
- Governance structure: CEO and Chairman roles are separated; independent director (Dr. Braunlich) serves as Chairman. Independent directors met in executive session once in 2024. All board committees are composed solely of independent directors except the Compliance Committee (which includes Mr. Lee). Each committee is chaired by an independent director .
- Committee memberships and chairs (2024): Audit (Chair: Shaunnessy; members: Marshall, Braunlich); Compensation (Chair: Green; members: Shaunnessy, Braunlich); Compliance (Chair: Marshall; members: Handler, Braunlich, Lee); Nominating & Corporate Governance (Chair: Handler; members: Green, Braunlich) .
- Attendance: Board held 5 meetings in 2024; each director attended at least 75% of board and committee meetings; committees met Audit (5), Compensation (2), Compliance (5), Nominating (2) .
Director Compensation (inside director)
- Mr. Lee is an employee-director; his compensation is reported in the executive Summary Compensation Table. The equity plan prohibits repricing or exchange of equity awards without shareholder approval; clawback policy applies to cash and equity awards .
Compensation Structure Analysis
- Mix and performance alignment: 2024 included time-based options and performance-based shares; PSUs are tied to multi-year CAGR in Adjusted EBITDA and Free Cash Flow Per Share. The compensation committee cancelled 142,555 PSUs in March 2025 (41,391 for Lee) due to unmet performance hurdles for 2024, signaling enforcement of pay-for-performance .
- Cash vs equity and discretion: No payout on EBITDA metric (below threshold at $48.6m vs $50m), but maximum qualitative payouts (40% for CEO) were granted recognizing strategic milestones (Chamonix completion, Stockman’s sale, growth at American Place). CEO’s 2024 bonus of $240,000 equals 40% of salary, matching the qualitative max scale .
- Governance protections: Prohibition on hedging/pledging; clawback policy; independent compensation committee; option repricing prohibited .
- Peer benchmarking: AETHOS advised on peer group and program design; company aims to pay CEO base near the 50th percentile of peers; 2024 peer set included Accel Entertainment, Bally’s, Century Casinos, Golden Entertainment, Monarch, PlayAGS, Red Rock, Rush Street Interactive, among others .
Company Performance Context (FY 2024 vs 2023)
| Metric | 2023 | 2024 | YoY |
|---|---|---|---|
| Revenues ($000) | 241,060 | 292,065 | +21.2% . |
| Adjusted EBITDA ($000) | 48,557 | 48,648 | +0.2% . |
| Net loss ($000) | (24,904) | (40,672) | (63.3%) . |
| Notes | EBITDA-based bonuses use Adjusted EBITDA; 2024 actual was below the $50m threshold for AIP payout on that metric . |
Risk Indicators & Red Flags
- Pledging/hedging: Prohibited — reduces alignment risk from collateralized or hedged positions .
- Option repricing: Prohibited without shareholder approval .
- PSU cancellations: 2025 cancellations underscore stringent targets; mitigates windfalls but could reduce retention value if targets remain out of reach .
- Leverage/financial risk (context): High indebtedness ($450.0m Notes outstanding at 12/31/2024) and net losses heighten execution risk for multi-year PSU metrics tied to EBITDA/FCF per share .
Vesting Schedules and Insider Selling Pressure
- Near-term vesting events: CEO options from 1/2/2024 (87,822 @ $5.15) and 1/2/2025 (97,267 @ $4.62) vest 1/3 annually on each Jan 2 anniversary — potential periodic liquidity windows as tranches vest (subject to trading windows and policy) .
- 2024 PSU tranche outcome: 2024-related PSU hurdles were not met; 41,391 CEO PSUs were cancelled in March 2025, reducing potential forced-selling pressure from vesting PSUs in the near term .
- 10b5-1 plans/Form 4: The proxy describes insider trading policies and references the filed policy, but does not disclose individual 10b5-1 plans; no specific Form 4 analysis was provided here .
Say-on-Pay & Shareholder Feedback
- The proxy highlights “pay versus performance” disclosure with CEO compensation actually paid ($1.04m in 2024) and cumulative TSR values; explicit prior say-on-pay vote percentages were not observed in the retrieved sections .
Expertise & Qualifications
- Education: BS Hotel Administration; MBA — Cornell University .
- Domain expertise: Decades across gaming operations, development, and finance; former CFO at Mirage; led large public operator (Pinnacle); prior CFA and gaming-sector analyst .
- Track record: Oversaw ramp of American Place (temporary) and Chamonix openings in 2023–2024; continued revenue growth in 2024; disclosed 10-year TSR of ~234% through 3/31/2025 .
Compensation Committee Analysis
- Committee: Independent directors Green (Chair), Braunlich, Shaunnessy; no interlocks in 2024 (except legacy service by Shaunnessy as former EVP/CFO, 1998–2004) .
- Consultant: AETHOS Consulting Group provided 2024 recommendations on peer group and program design .
Investment Implications
- Alignment: Program features (no hedging/pledging, clawback, PSU cancellations upon misses) indicate real pay-for-performance discipline. 2024 bonus outcomes (zero on EBITDA, capped qualitative) suggest balanced recognition of milestone execution without overpaying for under-threshold financials .
- Retention and selling pressure: Upcoming option tranche vestings on January anniversaries could create incremental selling windows, but PSU cancellations reduce near-term PSU-driven supply; prohibitions on pledging/hedging reduce forced selling risk .
- Ownership and influence: Lee’s 5.6% beneficial stake aligns interests with shareholders; significant option exposure tightens alignment to long-term price appreciation .
- Contract risk: Severance of 1x salary plus target bonus and full option acceleration on a qualified termination provides downside protection; contract expiry at 12/31/2025 and CIC definitions warrant monitoring around leadership continuity and negotiation leverage .
- Execution risk: Multi-year PSU metrics tied to EBITDA/FCF per share will be sensitive to ramp and leverage; 2024’s EBITDA shortfall vs threshold and higher net loss underscore the importance of successful Chamonix ramp, American Place progress, and balance sheet management for future payouts and TSR .
Sources: FLL 2025 DEF 14A (filed 4/7/2025) and FLL 2024 Form 10-K (filed 3/11/2025), as cited above.