Frank Fertitta III
Red Rock ResortsAbout Frank Fertitta III
Frank J. Fertitta III, age 63, is Chairman of the Board and Chief Executive Officer (PEO) of Red Rock Resorts (RRR); he has served as CEO since May 2016 and Chairman since September 2015, and has led Station Casinos LLC as CEO since June 2011, with senior leadership roles at the predecessor company dating back to 1985 . Under his tenure, the company reported Net Income of $291.3M and Adjusted EBITDA of $795.9M for 2024, and the “Pay vs. Performance” table shows a $100 RRR investment valued at $230.69 in 2024 vs $97.42 for the peer group, contextualizing pay and performance alignment . RRR is a “controlled company” with the Fertitta Family Entities holding approximately 90% of combined voting power as of the 2025 record date, which shapes governance and compensation design considerations .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Station Casinos Inc. (STN) | Chairman; CEO; President | Chairman: Feb 1993–Jun 2011; CEO: Jul 1992–Jun 2011; President: 1989–Jul 2000 and Jul 2008–Jun 2011 | Led predecessor through multi-decade growth; governance continuity into Station LLC/Red Rock |
| Station Casinos LLC (Station LLC) | CEO; President | CEO: Jun 2011–present; President: Jan 2011–Oct 2012 | Oversaw operating subsidiary during and after Red Rock’s IPO structure |
| Palace Station | General Manager | 1985 | Early operating leadership foundational to later executive roles |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Fertitta Entertainment | Co-owner; CEO | CEO since Apr 2011; co-owner until its acquisition by Station LLC in May 2016 | Integrated FE into Station LLC, aligning ownership/operations |
| Zuffa, LLC (UFC) | Co-owner | Until Aug 2016 sale | Value creation via sale; diversified executive experience beyond gaming |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 |
| Target Bonus (% of salary) | 100% (employment agreement) | 100% (employment agreement) | 100% (employment agreement) |
| Actual Annual Bonus ($) | 1,000,000 | 1,000,000 | 900,000 |
| All Other Compensation ($) | 1,259,074 | 1,480,037 | 1,430,623 |
All other compensation detail (2024):
- Life insurance: $258,465; Executive medical: $85,923; Other: $1,086,235, primarily personal security services provided by the Company .
Program design notes:
- Annual incentives were determined holistically by the Compensation Committee considering sustained performance since 2020, retention, and efforts associated with the opening/operation of Durango and other properties .
- Stock ownership guidelines: CEO 5x base salary; 5-year compliance window .
- NASDAQ-compliant clawback policy effective Oct 2, 2023 (recoup excess incentive-based comp upon “big R” or “little r” restatement) .
Performance Compensation
Long-term incentives for CEO:
- CEO received no stock or option awards in 2020–2024; consequently, “compensation actually paid” equals SCT total for these years for the PEO .
Annual incentive mechanics (2024):
| Incentive | Metric(s) | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual cash incentive | Holistic review of Company operating performance, retention needs, Durango opening/operation; no formulaic metrics disclosed | N/A | Target opportunity 100% of salary | $900,000 | Cash, no vesting |
Company-wide LTI design (context for NEOs):
- 2024 awards to NEOs (not CEO) were time-based options (7-year term) and restricted stock; options vest 33-1/3% on each of the 2nd, 3rd, and 4th anniversaries; restricted stock vests 50% on each of the 3rd and 4th anniversaries . General program description highlights four-year time-based vesting and option alignment with shareholder value .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Class A beneficial ownership | 3,819,089 shares (6.4%) |
| Class B beneficial ownership | 45,385,804 shares (98.7% of Class B) |
| Combined voting power | ~90.0% (Fertitta Family Entities aggregate) |
| CEO outstanding equity awards at 12/31/24 | None (no options/RSUs outstanding) |
| Pledging (red flag) | Shares subject to pledge: 2,697,535 (2024 proxy) ; 1,897,535 (2025 proxy) |
| Hedging/derivatives policy | Prohibits short sales and Company-based derivative transactions; pre-clearance required for insiders for any monetization/hedging transactions |
| Ownership guidelines | CEO required to hold 5x base salary; counting shares owned and unvested restricted stock; 5-year compliance window |
Notes:
- The family-controlled dual-class/voting structure concentrates control; Class B shares held by Fertitta Family Entities receive 10 votes per share if specified thresholds are met, resulting in ~90% combined voting power as of the 2025 record date .
Employment Terms
| Term/Provision | CEO Terms |
|---|---|
| Agreement term | Fixed five-year term; extended in March 2022 for an additional five years from March 2, 2022 |
| Termination without cause (non-CoC) | Cash equal to one year base salary ($1,000,000), prorated annual bonus (shown as $1,000,000 target for illustrative estimate), 12 months health benefits ($11,020), no equity acceleration for CEO |
| Resignation for “good reason” | CEO can resign for “good reason” at any time (not limited to change in control) and receive same benefits as termination without cause |
| Involuntary termination following CoC | Same cash and health benefits as above; no equity acceleration shown for CEO |
| Non-compete / non-solicit | Applies through the second anniversary of termination for the defined “Restricted Area” (other than the Las Vegas Strip) and through the first anniversary for the Las Vegas Strip |
| Clawback | NASDAQ-compliant policy covering cash and equity incentives; 3-year lookback for restatements |
Board Governance and Director Service
- Structure and independence: Red Rock is a NASDAQ “controlled company” as the Fertitta Family Entities hold >50% of voting power; though exempted from certain requirements, a majority of the Board is independent, and the Compensation and Nominating committees are fully independent as of the proxy date .
- Board roles: Frank J. Fertitta III serves as combined Chairman and CEO; the Board appoints a Lead Independent Director (James E. Nave, D.V.M.) with defined responsibilities to balance governance (executive sessions, agenda setting, evaluations) .
- Committees: Independent directors serve on Audit (Chair: Dr. Nave), Compensation (Chair: Robert E. Lewis), and Nominating & Corporate Governance (Chair: Robert A. Cashell, Jr.); attendance was 100% across Board and committees in 2024 .
- Director compensation: Employees (including the CEO-Chair) receive no additional director pay; 2024 non-employee director pay comprised cash retainers and equity awards (e.g., annual stock grant ~3,162 shares) with role-based committee/lead fees .
Dual-role implications:
- The combined CEO/Chair role is mitigated by a Lead Independent Director and fully independent key committees; however, the controlled-company status and family voting control reduce traditional minority-shareholder checks and may concentrate decision authority with management/controlling holders .
Say-on-Pay, Peer Group, and Committee Practices
- Say-on-Pay: 2024 investor support was approximately 97.82% for 2023 NEO compensation; the Board noted strong support and made no significant changes as a result . At the June 5, 2025 meeting, say-on-pay passed with 498,384,986 “For,” 6,596,982 “Against,” and 12,575 “Abstain” .
- Peer group: Based on S&P 1500 Casino & Gaming index constituents plus hospitality/gaming equipment companies (e.g., LVS, MGM, WYNN, PENN, Caesars, Boyd, Hyatt); used to monitor practices but not as a formal benchmarking determinant of pay levels .
- Compensation consultant: Pay Governance retained since 2016; determined independent by the Committee; provides advice on trends, peers, equity practices .
Related Party Transactions and Governance Risks
- Tax Receivable Agreement: Liability of $20.4M at 12/31/2024, including $5.6M payable to certain Fertitta Family Entities; early termination/change-in-control could accelerate payments and affect liquidity .
- Aircraft Time Sharing Agreement: ~$252,734 paid in FY2024 to an Aviation Company affiliated with Frank and Lorenzo Fertitta; Board asserts costs are below third-party alternatives; terminable on 10 days’ notice .
- Family employment: Compensation paid to family members (e.g., Lorenzo Fertitta, VP/Vice Chairman; and two of Mr. Fertitta’s children in Station LLC roles) disclosed per related party policy .
- Pledging: Shares in the F&J Fertitta Family Trust are subject to pledge arrangements (1,897,535 as of 2025 proxy; previously 2,697,535), a governance red flag though hedging/derivative transactions are generally prohibited by policy .
Company Performance Context
Pay versus performance (as disclosed):
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| PEO Total Comp (SCT) ($) | 2,442,109 | 3,150,788 | 3,259,074 | 3,480,037 | 3,330,623 |
| PEO “Comp Actually Paid” ($) | 2,442,109 | 3,150,788 | 3,259,074 | 3,480,037 | 3,330,623 |
| RRR TSR (Value of $100) ($) | 105.83 | 247.08 | 188.39 | 256.56 | 230.69 |
| Peer TSR (Value of $100) ($) | 115.48 | 113.77 | 90.05 | 104.02 | 97.42 |
| Net Income ($) | (174,543,000) | 354,830,000 | 390,352,000 | 337,776,000 | 291,292,000 |
| Adjusted EBITDA ($) | 368,485,000 | 740,991,000 | 743,878,000 | 745,968,000 | 795,900,000 |
Selected financial trends:
-
Annual revenue and EBITDA | Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 | |---|---:|---:|---:|---:| | Revenues ($) | 1,541,153,000* | 1,573,627,000* | 1,628,876,000* | 1,838,154,000* | | EBITDA ($) | 718,320,000* | 722,028,000* | 723,200,000* | 762,508,000* |
-
Recent quarterly revenue and EBITDA | Metric | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | |---|---:|---:|---:|---:| | Revenues ($) | 470,928,000* | 472,687,000* | 490,357,000* | 446,581,000* | | EBITDA ($) | 197,159,000* | 202,684,000* | 216,016,000* | 180,460,000* |
Values retrieved from S&P Global.*
Investment Implications
- Alignment and retention: The CEO’s pay is predominantly fixed cash (salary) plus a discretionary annual bonus, with no LTI grants in 2020–2024; alignment relies on very large beneficial ownership and concentrated voting control rather than ongoing performance equity, which can reduce dilution but may weaken direct pay-for-performance sensitivity for the PEO .
- Selling pressure and pledging: The presence of pledged shares in the F&J Fertitta Family Trust represents a governance risk; while the pledged amount decreased versus the prior proxy, any forced sales could pressure the stock in stress scenarios .
- Change-in-control/severance economics: CEO severance is modest (1x salary plus prorated bonus and 12 months health) and does not include equity acceleration, limiting golden parachute risk; CEO’s “good reason” right is broader than peers (not limited to CoC), which could be a negotiation lever but is offset by modest cash multiples .
- Controlled-company governance: With ~90% combined voting power controlled by the Fertitta Family Entities, minority investors have limited influence; this concentrates strategic flexibility but raises governance discounts, particularly given dual role (CEO/Chair) and related-party arrangements (tax receivable agreement, aircraft time-sharing) .
- Performance backdrop: Adjusted EBITDA improved to $795.9M in 2024 amid the Durango opening and continued operations, consistent with the Committee’s qualitative incentive determinations; however, annual PEO incentives remain discretionary without disclosed quantitative thresholds, which could attract investor scrutiny despite strong prior say-on-pay results .
Net impact: Strong insider ownership and disciplined severance limit pay risk; pledging and controlled-company dynamics are key governance watchpoints, and the discretionary bonus framework (absent explicit metrics) is likely to remain acceptable to investors so long as EBITDA/TSR execution sustains and related-party exposures remain contained .