Melco Resorts has announced a share purchase and award program that is eligible for employees at the management level and above.
The integrated resort firm that owns and operates large-scale casinos in Macau, Philippines, and Cyprus announced today that it is allowing certain staffers to use a portion of their base salary in exchange for company shares. Melco is offering an aggregate value equal to 200 percent of the payment remitted.
For example, if an executive pledges to reduce his or her salary by $25,000, that person will be issued $75,000 worth of Melco shares.
The Share Purchase and Award Program demonstrates our recognition of the dedication and commitment our colleagues have demonstrated during the height of the COVID-19 pandemic last year,” said Melco founder, chairman, and CEO Lawrence Ho.
“As the pandemic gradually subsides, we would like to extend our gratitude and appreciation to all our colleagues and ensure they have the chance to capitalize on the long-term growth of the Company,” Ho continued.
Lawrence Ho, the oldest living son of the late “King of Gambling” Stanley Ho, has an estimated net worth of $1.9 billion. Ho inherited a mass of wealth but has made himself a billionaire on his own accord by way of founding Melco Resorts.
In April, Melco awarded Ho $10 million in shares as a token of the board’s gratitude for his ongoing commitment to the group. The board said the bonus is “for incentivizing and motivating” Ho for the “future development of the Melco Resorts Group,” and that the $10 million is in the best interests of the company and its shareholders.
Ho is now taking advantage of the share purchase program. According to a securities filing, Ho received approximately $6.68 million in the Share Purchase and Award Program. That means Ho exchanged around $2.23 million of his base salary for the shares.
The Melco notice said Ho’s participation allows the company to lower its management costs and preserve cash that is much needed in wake of the COVID-19 pandemic. Melco adds that the Share Purchase and Award Program, which runs through June of 2022, represents less than 0.5 percent of the company’s total shares outstanding.
Melco is currently under construction on its €550 (US$667 million) City of Dreams Mediterranean. The integrated resort in Cyprus is expected to open in 2022.
Melco is additionally hoping to win one of Japan’s three forthcoming casino licenses. The company is targeting Yokohama for its resort ambitions.
Melco Resorts’ employee share program comes while the stock is trading far cheaper than it was just a few months ago.
In early March, Melco’s stock, which is traded on the Nasdaq, was hovering around $22. Today, it’s trading around $16. This was a 27 percent drop.
But with Ho and other executives taking advantage of the share program, something that might suggest that the insiders are bullish on the company’s outlook, investors reversed the selloff trend. As of afternoon trading today, Melco shares were up more than 3.5 percent.
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