GGRAsia – Senior executives exit Melco group, CEO forgoes 2020 salary

Senior executives exit Melco group, CEO forgoes 2020 salary

Apr 29, 2020 Newsdesk Latest News, Macau, Top of the deck

A number of senior executives is leaving casino developer and operator Melco Resorts and Entertainment Ltd, as the Covid-19 pandemic continues to affect negatively the global gaming industry. The firm’s chairman and chief executive, Lawrence Ho Yau Lung, is also forgoing his salary for the remainder of 2020, according to a letter sent to staff and seen by GGRAsia.

The document – signed by Mr Ho – announced the “voluntary departure” of several executives in senior positions across different departments of the company. It also stated that Melco Resorts’ corporate executive team would reduce the aggregate of its salary payments by 33 percent for the remainder of this year. All of the firm’s executives, including its CEO, have also “forfeited all unused leave”.

In an emailed statement to GGRAsia, a Melco Resorts spokesperson said the company would not comment on the departure of executives. But the person did confirm that Mr Ho was to “forgo his salary for the rest of the year”. The person also confirmed the salary reduction for the firm’s remaining corporate executive team.

In the letter to staff, Mr Ho said the coronavirus crisis was affecting the company’s business, with the firm’s operations in the Philippines and Cyprus “completely shut due to lockdown [measures] in both countries”.

Mr Ho also said the departure of several of the company’s senior executives was “only due to the current state of the business environment”.

Aside from running properties in the Macau market, Melco Resorts operates via a unit the City of Dreams Manila in the Philippine capital; and is the leading partner in a consortium that runs gaming operations in the Republic of Cyprus.

Casinos in Macau are currently open – following a 15-day suspension in February – but since then “the number of customers is virtually zero,” stated Mr Ho in the document circulated to employees.

As part of efforts to contain the spread of the Covid-19 disease, a number of travel restrictions has been put in place in Macau and neighbouring regions. Macau has not recorded any new case of Covid-19 infection for the past 20 days, and in Hong Kong the number of new daily cases has been down to single digits.

“We very much hope this will create the conditions for the easing of the border controls; but even with its opening, it is difficult to assess the confidence of people to travel,” said the Melco Resorts CEO in the letter. “2020 will be a year of negative business results which may carry over into 2021,” he added.

Nasdaq-listed Melco Resorts said in a Tuesday filing that the business disruptions caused by the Covid-19 had “continued beyond the first quarter of 2020 and may worsen”.

“Any recovery from such disruptions will depend on future developments, such as the duration of travel and visa restrictions and customer sentiment, including the length of time before customers will resume travelling and participating in entertainment and leisure activities at high-density venues, all of which are highly uncertain,” stated the company.

It was announced on Wednesday that Melco Resorts had sold its entire 9.99-percent stake in Australian gaming operator Crown Resorts Ltd, for an aggregate AUDAUD551.6 million (US$360.1 million). That was a discount of 37.3 percent compared to the price Melco Resorts paid in May last year for those shares.