Business:

Caesars executives receive bonuses for cutting costs

Caesars Entertainment Corp. today said it awarded $7.75 million to certain executives for achieving a cost-cutting target.

Cutting costs has been a priority for CEO Gary Loveman during the worst recession in memory around the country and on the Las Vegas Strip; and as the company continues to face hefty payments to service its $18.6 billion in debt.

Caesars said in a regulatory filing the bonuses were awarded after it achieved $100 million in savings on a run rate basis, meaning savings that had been sustained for at least three months.

The bonuses were available under a program to “incent leadership to undertake the cost savings initiatives proposed as part of comprehensive program to streamline the company’s operations,” Caesars said in a regulatory filing today.

“Caesars Entertainment has undertaken comprehensive cost reduction efforts to right-size expenses with business levels,” Caesars disclosed in its first quarter earnings report. “During the fourth quarter of 2010, the company began a new initiative to reinvent certain aspects of its functional and operating units to gain significant further cost reductions and streamline our operations. During the quarter ended March 31, 2011, the company realized cost savings of $66.2 million and has estimated cost savings yet to be realized of $157.4 as of that date.”

Executives receiving the bonuses disclosed today include Loveman, $1 million; Thomas Jenkin, president of the Western Division; $300,000; John Payne, president of the Central Division, $265,250; and Chief Financial Officer Jonathan Halkyard, $157,500.

Caesars, which lost $147.5 million in the first quarter, hasn’t yet reported second quarter earnings.

Despite the first quarter loss, Caesars said business was finally picking up on the Las Vegas Strip at that time. Net revenue in the first quarter in Las Vegas totaled $726.4 million, up 6.4 percent.

The company’s Las Vegas properties are Bally’s, Bill’s Gamblin’ Hall & Saloon, Caesars Palace, Flamingo Las Vegas, Harrah’s Las Vegas, Imperial Palace, Paris, Planet Hollywood and the Rio.

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