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Hitting the jackpots at MGM Mirage __»

When you walk into a casino, you should pretty much count on leaving some money behind — everyone knows the odds usually favor the house. But shouldn’t casino-company investors expect something different?

Maybe not at MGM Mirage (soon to be renamed MGM Resorts International), to judge from its latest preliminary proxy filing.

Let’s face it, 2009 wasn’t a good year for MGM Mirage, or for its shareholders: Revenue fell 17%, and MGM’s net loss widened to $1.3 billion from $855 million. Counting dividends, MGM shares handed in an abysmal total return of -33.7%, trailing the S&P 500 by 57 points and other resorts and casinos by more than 5 points. 2008 wasn’t pretty either.

Nonetheless, the champagne seems to have flowed a little faster, and the disco balls glittered more brightly, in the executive suite.

Chairman and Chief Executive James J. Murren saw his total compensation for 2009 jump to $13.75 million, from $4 million in 2008 and $6.6 million in 2007. Much of that came in the form of stock appreciation rights and options ($7.1 million), but he also got $3.4 million in cash incentive pay, a $500,000 bonus, and a $500,000 raise (bringing his salary to $2 million a year).

At this rate, the worse MGM does, the better Murren seems to do: By our calculation, Murren personally pocketed the equivalent of about 1.1% of the company’s losses last year — $1 for every $93.93 MGM lost. By contrast, in 2008, his total pay worked out to just under half of 1% of net losses. Other top execs saw their compensation rise sharply as well, by as much as 36%.

The pay came under a new contract that took effect in April 2009, just four months after he took the CEO’s job, and the bonus came “in recognition of their efforts relating to the financing of CityCenter” — the sprawling and troubled complex jointly developed by MGM and Dubai World — “as well as executing capital raising transactions that improved the Company’s financial position.”

Nor does Murren stand to suffer much if shareholders and the board decide he’s no longer playing his hand as well as he might. He already cashed out $3.5 million last year from the company’s deferred compensation plan — a sort of super-sized 401(k) arrangement sometimes described by consultants as a loan to the employer — leaving just over $65,000 behind in the company’s care. And if he’s fired, he stands to collect up to another $14.6 million in severance, including $7 million cash. (He can get a similar package if he quits after a merger.)

All of which just goes to show: Few things in life are like betting on a sure thing — unless you’re an MGM executive.

Image source: joevare via Flickr