KEY POINTS:
SkyCity has given new chief executive Nigel Morrison a hefty remuneration package to "rebuild to restore" the casino group to its glory days in 2003 and 2004.
Potentially, he will be able to earn $3.7 million a year with at least a third of bonuses paid in shares.
Investors welcomed the appointment of the Australian casino executive who leaves Macau-based Galaxy Entertainment Group after less than a year as group chief financial officer.
Galaxy runs five casinos in Macau, including its flagship StarWorld Hotel Casino with annual gaming revenues of more than $1.25 billion.
In just four years, Galaxy has captured about 20 per cent of the booming Macau gaming market.
But despite the positive end to a six-month executive search, the SkyCity share price slid by 9c yesterday to close at $4.52.
Market sources viewed yesterday's announcement as an indication there was less chance that United States private-equity company TPG would go ahead with a takeover of the troubled casino company, a move that would boost the company share.
TPG has indicated it is interested but global credit markets' free fall over the past few days has made it hard.
A likely bid price of about $5.30 might still look attractive to investors given the current market outlook - if TPG can raise the money.
But that is a big "if" in the current credit crisis and chairman Rod McGeoch said yesterday there was no new information on TPG.
Investors have criticised the lack of gambling expertise at the company board and McGeoch has said that was a big factor in the selection process.
Morrison told the Business Herald that casino experience was "hugely important".
Running casinos was not like rocket science.
"But they do have some peculiarities and you need to look at the business in a certain way and the business need to be structured to realise their potential."
Gaming businesses which did not have strong gaming management at the most senior level were missing something, he said.
Morrison has more than 18 years' experience in the gaming industry throughout Australia and in Asia.
He was chief executive of the Federal Group, Australia's largest private casino and gaming company.
Before that he was chief operating officer at Crown Limited (operator of Melbourne's Crown Casino) where McGeoch says he played a big role in restructuring the business.
Galaxy Entertainment Group in Macau is a Hong Kong-based listed company with a market cap of $5 billion.
British private-equity company Permira has taken a 20 per cent stake in Galaxy and Morrison said he believed Permira would have been pleased for him to stay. It is understood that TPG had indicated it would be happy to have Morrison in the top job.
The chief executive role has been filled by Elmar Toime since Evan Davies left in June. McGeoch said Toime had been successful reducing costs and Morrison would make improvements to revenue.
Morrison was taking over a company that was leaner than in June.
His basic salary will be $1.3 million with incentives up to $1.2 million a year, that can be taken in cash or shares. He will also be entitled to long-term incentives up to $1.8 million by way of share rights that can be obtained at no cost.
With an eye on the possibility that the group may still get a takeover offer he also has a clause that allows him to walk away with two years' salary if the company is sold.
If SkyCity terminates his job within the first year of his employment he will be paid the equivalent of two years' pay and if it terminates before two years then the 200,000 shares he is allocated - when he starts the job on March 17 - will be immediately be paid up.
On yesterday's closing price those 200,000 shares would be worth about $900,000.
Nigel Morrison
New SkyCity CEO
Since Feb 2007 Group CFO, Galaxy Entertainment Group
2000-2006 CEO, Federal Group
1997-2000 Chief operating officer, Crown Limited
1993-1997 CFO, Crown Limited
Before 1993 National Gaming partner, advisory Ernst & Young
