Raise, bonus for LVCVA executive doesn’t necessarily do him any favors

The Las Vegas Convention and Visitors Authority’s compensation committee may not have done LVCVA President and CEO Rossi Ralenkotter any favors by recommending that he be given a 4 percent raise and a 12.5 percent bonus for the work he’s done this past year.

In dollars and cents, that’s a $10,238 increase to Ralenkotter’s annual salary and a one-time bonus of $31,933 based on his current salary of $255,944.

And it’s all happening at a time when organized protests nationwide are bashing CEOs for their compensation.

It’s not that Ralenkotter isn’t worth it. While there are plenty of people out there who are critical of the LVCVA’s marketing strategy and don’t care for the “What happens here, stays here” campaign, it’s hard to argue that Ralenkotter’s team hasn’t contributed to Las Vegas’ slow and steady economic turnaround.

The fact the turnaround isn’t complete is the reason that the compensation committee had a split vote on the salary recommendation. Kristin McMillan, a relative newcomer to the LVCVA board, voted against the recommendation endorsed by Clark County Commissioner Tom Collins, the board’s chairman, and longtime board member Chuck Bowling, an MGM Resorts International executive.

The LVCVA board is populated with a mix of resort industry executives and elected government leaders. While most elected officials have been forced to pare their budgets, the industry executives usually are more inclined to recognize the value of top-level CEOs and compensate them handsomely to make sure they aren’t hired away by a hard-charging rival.

What makes the LVCVA matter interesting is that it was the elected official, Collins, who held strongly to giving Ralenkotter the raise and a business leader, McMillan, who urged holding back.

What’s even more interesting is that when Ralenkotter offered his recommendation on what to do about compensating the LVCVA’s executive team, he suggested no salary increases, but paying the midpoint in the range of pay-for-performance bonuses, a concept approved philosophically in 2002.

The midpoint recommendation means a one-time bonus of 7.5 percent for management, 10 percent for executives and legal counsel and 12.5 percent for himself.

But he recommended no annual salary merit increases.

The question now is what would Ralenkotter do if the recommended increases are approved by the full board, a matter to be taken up at a Nov. 17 meeting? Will he take the 4 percent increase himself but do nothing for management and the executives? Or, would he bump his colleagues up 4 percent at a cost of thousands of dollars in the LVCVA budget at a time when the economy hasn’t fully recovered?

There are other considerations in play.

According to a survey of CEOs in similar positions nationwide, Ralenkotter is underpaid. Plenty of critics dispute that.

A survey of 13 similar convention and visitors’ bureaus conducted by Stamford, Conn.-based Performance Solutions Group shows Ralenkotter’s compensation is 76.7 percent of the national average, down from 94.7 percent the last time the survey was conducted in 2007. In addition, Ralenkotter and his team have the added responsibility of managing a convention center, something other bureaus don’t have.

Collins and Bowling want to be sure some other bureau doesn’t steal away Ralenkotter, who is well-respected nationwide and holds important positions on a number of influential national organizations.

Would the critics who believe Ralenkotter to be overpaid want to risk losing him? Would they prefer to turn the job over to someone with less experience and no national influence if an executive head-hunter could even find someone to do it with the kind of pay critics believe the job is worth?

Another wild card is Ralenkotter himself. He’s home-grown and loves Las Vegas. He’d be one of the last people I’d expect to be drawn to a rival like Orlando or even some other private-sector position. Tourism and Las Vegas is in his blood.

It seems unlikely that the LVCVA board would take advantage of the knowledge that Ralenkotter probably wouldn’t leave.

McMillan said she would continue to lobby for paying him the bonus, but not a higher salary. Collins and Bowling will make their case for keeping him paid at a high level.

We’ll know in a few days which way the LVCVA pay scale will tip.