Troubled Star brings Steve McCann as new CEO with $10m pay deal
Former Crown Resorts boss Steve McCann has been picked to lead struggling Star Entertainment with an eye-watering salary package, that includes a $2.5m sign-on bonus.
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Former Crown Resorts boss Steve McCann has been picked to lead rival casino operator Star Entertainment out of its regulatory quagmire with a $10m salary package that includes a $2.5m sign-on bonus and $5m worth of performance rights.
Star will pay its nominated white knight – who will join on July 8 subject to regulatory approvals – $2.5m in fixed annual remuneration.
In a nod to continuing doubts about the future of Star following the end of the Bell II inquiry, the board decided “setting performance hurdles under the long term incentive plan for a four-year period will be extremely challenging given the level of current uncertainty.”
Subject to shareholder approval, McCann also will get $5m in sign-on performance rights as a once-off grant, which will vest three years after his joining date.
That will be subject to Mr McCann, a former chief executive of Lendlease, not resigning or being terminated by the company for cause within the three-year period.
Star chairman Anne Ward said that, following a comprehensive executive search, the board was “pleased to have secured a CEO of Steve’s calibre, experience and respect in the market”.
“Given his time with Crown, and previous longstanding leadership at Lendlease, he has the right credentials to lead The Star’s remediation program,” Ms Ward said.
“His track record reflects his capability to work collaboratively with multiple stakeholders and lead meaningful transformational change and cultural renewal. This experience will be invaluable as we work towards rebuilding trust and expediting the sustainable transformation of The Star.”
Mr McCann’s appointment was yesterday welcomed by the NSW Independent Casino Commission and Wilson Asset Management Leaders, one of Star’s biggest shareholders.
WAM Leaders lead portfolio manager Matthew Haupt said the salary package Mr McCann had negotiated with Star was “small fry” compared to the skills he would apply to what would be a difficult job.
“He has shown previously, including at Lend Lease, that he likes a hard gig,” Mr Haupt said, referring to the restructuring of Lend Lease Mr McCann oversaw in 2013 that led to major job losses.
Mr McCann said he recognised “there are many complex issues and challenges for the company to address”.
“I am committed to working with the board and the various stakeholders to help drive change, restore confidence and achieve a sustainable resolution,” he said.
The gaming group has lost a string of executives in recent months, including former CEO Robbie Cooke and chief financial officer Christina Katsibouba, as it faced continuing regulatory scrutiny of its operations in Sydney and Queensland.
Adam Bell SC last month completed his second inquiry into Star’s suitability to hold a casino licence in Sydney, following a probe in 2022 that found it had not met its obligations to prevent money laundering and other misconduct.
Mr Bell is expected to make his recommendation to the NSW Independent Casino Commission next month.
The support from the NICC is a sign the regulatory tide may be turning in favour of Star given that, during his inquiry, Mr Bell had launched a broadside against the slow progress of reform at the company, comparing it unfavourably with Crown.
Star will need to refinance more than $1bn worth of debt over the next 18 months for its new Queens Wharf project in Brisbane.
Testimony to the inquiry by a succession of former Star executives had revealed a deeply conflicted leadership at war with the regulator, as well as allegations of fraud, falsification of safe gambling welfare checks and spying.
Star warned earlier this week that cost-of-living pressures and economic challenges would continue to hit its bottom line, citing declines in revenue at its Sydney, Brisbane and Gold Coast properties. Revenue from previously lucrative gaming revenue is forecast to be down 16.5 per cent this quarter compared to the prior corresponding period.
Mr McCann, a horse racing enthusiast and former top poker player, is expected to focus on Star’s valuable real estate assets, including the $3.9bn Queen’s Wharf development, as he steadies the company’s finances.
With its market value at $1.37bn following a 50 per cent slump in its shares in the past year, Star is worth less than its property assets.
The company’s shares finished unchanged at 46c on Wednesday. Star has been the subject of takeover interest in recent months including a Queensland property developer with previous links to US casino and hospitality giant Hard Rock Cafe.
Market analysts said any takeover bid for Star would be complex and uncertain given its continuing financial challenges and the possible loss of its Sydney casino licence.
Originally published as Troubled Star brings Steve McCann as new CEO with $10m pay deal
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