Jeffrey Welch
Red Rock ResortsAbout Jeffrey Welch
Jeffrey T. Welch, age 63, serves as Executive Vice President and Chief Legal Officer of Red Rock Resorts (RRR) since June 2017, following senior legal roles at Deutsche Bank AG (Managing Director and Senior Counsel 2003–2017; Director and Counsel 1997–2003; Vice President and Counsel 1993–1997) and earlier practice at White & Case (associate 1988–1993) . He is a member of the New York State Bar and the Nevada Bar Association and previously represented Deutsche Bank on the Station Holdco board (2013–2016) . Company performance context during his tenure: Adjusted EBITDA reached $795.9M in 2024 (vs. $368.5M in 2020), and cumulative TSR value per the “Pay vs Performance” disclosure shows a $100 initial investment at $230.69 in 2024 (2020–2024 series), while net income was $291.3M in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Deutsche Bank AG | Managing Director & Senior Counsel | 2003–2017 | Senior legal leadership for financing and governance; represented Deutsche Bank on Station Holdco board (2013–2016) |
| Deutsche Bank AG | Director & Counsel | 1997–2003 | Senior counsel responsibilities |
| Deutsche Bank AG | Vice President & Counsel | 1993–1997 | Legal counsel supporting banking operations |
| White & Case | Associate | 1988–1993 | Foundational legal practice |
| Station Holdco (Deutsche Bank representative) | Board director | 2013–2016 | Governance oversight for pre-IPO structure |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Nevada Resort Association | Board member | — | Industry association board service |
| New York State Bar | Member | — | Professional membership |
| Nevada Bar Association | Member | — | Professional membership |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 738,461 | 750,000 | 750,000 |
| Bonus ($) | 750,000 | 750,000 | 675,000 |
| All Other Compensation ($) | 168,562 | 194,596 | 79,766 |
| Total ($) | 3,907,029 | 3,944,580 | 3,754,780 |
| Target Bonus % of Base | Value |
|---|---|
| Employment Agreement Target | 100% of base salary |
Breakdown of “All Other Compensation” (2024):
- Life insurance $25,502; Executive medical $5,962; Dividends $39,864; Other (incl. 401(k) match and tax preparation services) $8,438; Total $79,766 .
Performance Compensation
Annual Bonus Program (2024)
| Element | Details |
|---|---|
| Design | Holistic review; no specific formal financial targets; considers company performance, stock price, macro/micro factors, and individual performance |
| Key measures reviewed | Adjusted EBITDA, revenue, operating income (inputs, not targets) |
| Target | 100% of base salary ($750,000) |
| Actual payout | $675,000 (cash) |
| Vesting | Immediate (cash bonus) |
Long-Term Equity Awards (2024)
| Grant Type | Grant Date | Quantity | Strike Price | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| Restricted Stock | 2/16/2024 | 19,231 shares | — | 50% on 3rd and 4th anniversaries | 1,125,014 |
| Stock Options | 2/16/2024 | 39,823 options | 58.50 | 33-1/3% on 2nd, 3rd, 4th anniversaries | 1,125,000 |
Option Exercises and Stock Vested (2024):
| Metric | 2024 |
|---|---|
| Options Exercised (Shares) | 220,690 |
| Value Realized on Exercise ($) | 8,376,289 |
| Restricted Shares Vested (Shares) | 9,966 |
| Value Realized on Vesting ($) | 584,755 |
Equity Ownership & Alignment
Beneficial Ownership (as of record date)
| Holder | Class A Shares | % of Class A | Class B Shares | Notes |
|---|---|---|---|---|
| Jeffrey T. Welch | 746,890 | 1.2% | — | Includes 488,776 shares subject to options exercisable within 60 days |
Company shares outstanding at record date: ~60.1M Class A and ~46.0M Class B .
Outstanding Equity Awards (12/31/2024)
| Instrument | Exercisable (#) | Unexercisable (#) | Strike ($) | Expiry | Notes |
|---|---|---|---|---|---|
| Options | 159,174 | — | 29.61 | 3/8/2025 | — |
| Options | 303,599 | — | 24.63 | 2/14/2026 | — |
| Options | 81,842 | 40,311 | 25.91 | 2/18/2028 | RS unvested 9,966 MV $460,828 |
| Options | 18,721 | 36,341 | 45.36 | 3/18/2029 | RS unvested 23,835 MV $1,102,130 |
| Options | — | 76,863 | 46.26 | 2/10/2030 | RS unvested 11,950 MV $552,568 |
| Options | — | 40,522 | 57.49 | 2/16/2031 | RS unvested 19,231 MV $899,241 |
Stock ownership guidelines: Other NEOs must hold equity equal to 3x base salary; unvested restricted stock counts; five years to comply . Hedging/pledging policy prohibits short sales and derivative transactions; pre-clearance required for any monetization, hedging or non-standard transactions involving company securities . No pledging disclosed for Welch; note certain Fertitta trust shares are pledged (not Welch) .
Late Section 16 filing: One Form 4 for Welch in 2024 (grant and withholding on 2/16/2024) filed late .
Employment Terms
Agreement & Term
- Fixed five-year employment agreements; Welch’s term extended for an additional five years effective March 2, 2022 (i.e., through March 2027 unless otherwise terminated) .
Severance and Change-of-Control Economics
| Scenario | Salary Continuation ($) | Prorated Bonus Basis ($) | Health Benefits ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|---|---|
| Company terminates without cause (or good reason, other than CIC) | 750,000 | 750,000 target basis | 20,510 | — | 1,520,510 |
| Involuntary termination following change in control | 750,000 | 750,000 target basis | 20,510 | 3,856,270 | 5,376,780 |
| Death or disability | — | — | — | 3,856,270 | 3,856,270 |
Key terms:
- Additional severance mechanics: Salary continuation paid in 12 monthly installments; health/disability coverage continued for 12 months (or cash in lieu) .
- Equity: Board policy provides automatic acceleration upon death or disability; equity accelerates on a double trigger (involuntary termination following change in control) per termination estimates table .
- Restrictive covenants (non-compete/non-solicit): Apply to City of Las Vegas and area within a 30-mile radius, and any area in/within 30 miles of jurisdictions where RRR is engaged or actively pursuing gaming operations .
- Clawback: NASDAQ-aligned clawback effective Oct 2, 2023; recoups excess incentive-based compensation (cash/equity) over a 3-year lookback after “big R” or “little r” restatements; applies to Section 16 officers (includes Welch) .
Performance & Track Record
Pay vs Performance context (company-level):
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| 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 |
| TSR ($ value of $100) | 105.83 | 247.08 | 188.39 | 256.56 | 230.69 |
Say-on-Pay (2024 meeting): 97.82% approval, no significant program changes made as a result . Compensation peer group (used for context, not formal benchmarking): Casinos & Gaming and hospitality/equipment companies including Caesars, Wynn, MGM, Las Vegas Sands, Boyd, Light & Wonder, Hyatt, Choice Hotels, Marriott Vacations, Churchill Downs; based on S&P 1500 Casinos & Gaming Index .
Compensation Structure Notes & Signals
- Mix emphasizes stock options historically to align with shareholder value; 2024 awards included both options and restricted stock for Welch .
- No option repricing or repurchasing without shareholder approval (except equitable adjustments permitted under plan); 2024 option exercise prices were adjusted for special cash dividends via anti-dilution provisions .
- Ownership guidelines at 3x base salary promote alignment; unvested restricted stock counts toward compliance; hedging/derivative transactions prohibited, pre-clearance required for non-standard transactions .
Investment Implications
- Insider supply/pressure: Welch exercised 220,690 options in 2024 for $8.38M value realized, and has multiple large option blocks expiring 2025–2026 (e.g., 159,174 @ $29.61 expiring 3/8/2025; 303,599 @ $24.63 expiring 2/14/2026), which can create episodic selling pressure around vest/expiry dates .
- Retention risk: Base-plus-bonus severance at ~1x each, with double-trigger equity acceleration upon CIC termination provides meaningful protection; non-compete scope covers Las Vegas and 30-mile radii in active jurisdictions, supporting retention but not over-protective economics .
- Alignment: 1.2% direct Class A ownership and significant in-the-money options reinforce alignment; company-wide stock ownership guidelines and clawback reduce misalignment risk .
- Governance: Strong say-on-pay support (97.82%) and controlled-company status under NASDAQ (Fertitta entities hold ~90% combined voting power), suggesting low external compensation risk but potential minority-holder governance constraints .
Overall, Welch’s compensation is heavily equity-linked with clear vesting schedules and strong clawback/ownership policies, while option expiries and substantial past exercises are key trading signal dates; severance terms are moderate (≈1x salary+bonus) with double-trigger equity protection, balancing retention with shareholder alignment .