Casino operator MGM Resorts International is losing its long-time chairman/CEO Jim Murren and frantically forming a committee to identify his replacement.
On Wednesday, MGM dropped the bombshell that Murren had informed the company’s board of directors that he plans to step down from his roles as chairman and CEO “prior to the expiration of his contract.” No reason was cited for the early exit.
Murren said he will remain at his post until a successor is appointed. MGM has formed a committee of independent directors that will work with a “nationally recognized executive search firm” to identify and evaluate candidates to replace Murren.
MGM’s official statement quoted Murren saying that running MGM was “the most rewarding and fulfilling experience in my professional career.” MGM’s lead independent director Roland Hernandez thanked Murren for his years of service and pledged that the company would dedicate “significant attention and resources” to finding Murren’s successor.
Murren has been with MGM since 1998 and took over the chairman/CEO roles in 2008, just as the US casino market began to feel the effects of the global economic meltdown. The company’s shares plunged to just $2.33 by March 2009 but currently sit at $33.66 and enjoyed a brief uptick in after-hours trading following MGM’s announcement — try not to take it personally, Jim — before dropping around 3%.
Murren presided over a host of major changes at the company, not the least of which was the establishment of the MGM Growth Properties real estate investment trust. MGM has been accelerating the pace by which it sells off its real estate holdings, which is providing buckets of cash but leaves the company facing significant rent obligations in perpetuity.
Murren also led MGM into the unfamiliar world of online gambling via the Roar Digital joint venture with UK-listed operator GVC Holdings. The results have so far been more meow than roar but it’s early days yet and MGM shareholders appear content to let this bet ride for the time being.
Most importantly, Murren oversaw MGM’s expansion into Macau via the MGM China joint venture, which remains a significant contributor to MGM’s bottom line and helped see the company through the painfully slow recovery in Las Vegas and other regional US markets following the great recession.
Murren’s imminent exit means he likely won’t be at MGM’s helm when the company learns whether or not it has secured one of the three available casino licenses in Japan. MGM has vowed to break the bank building a Japanese integrated resort, which is part of the reason it’s been so eager to part with its real estate for quick cash.
Murren may not be missed by many current and former MGM staff who were handed pink slips as part of the company’s ‘MGM 2020’ plan, which involved cutting 3% of its US workforce. Considering this plan was unveiled less than a year after the company enjoyed a $1.4b tax windfall, Murren’s decision to quit may have been prompted after Christmas Eve visits by three ghosts warning him of his ultimate fate if he didn’t change his ways.