Casino company execs get lower-tax payday
The 15% tax on dividends can have unintended consequences, and it’s amazing how many CEOs who never liked dividends before love them under certain circumstances.For example, Casino operator Wynn Resorts has decided to use dividends to give a holiday gift to shareholders. On Dec. 21, the company will pay a special dividend of $5 a share. Stockholders will be pleased, and none more than Wynn insiders who control more than 36% of the outstanding shares. Among the big winners are people named Wynn: Chairman and CEO Stephen Wynn owns more than 10 million shares; his former wife, director Elaine Wynn, holds 9.8 million shares. They will collect a combined $99.3 million from the special dividend. Looked at another way, Wynn Resorts is essentially paying Steve Wynn a $50 million bonus. And since it is a qualified dividend, under current rules, it will be taxed at a 15% rate. If the cash had been paid as a bonus, it would have been taxed at 35%. So Steve Wynn ends up saving roughly $10 million in taxes because he received a dividend rather than a bonus. For company insiders lower on the ladder, the take still isn’t bad. Chief financial officer Matt Maddox will see a $300,000 payday and general counsel Kimmarie Sinatra will get more than $200,000. Name and title | Shares owned Stephen A. Wynn, Chairman, CEO, Director: 10,026,708 Elaine P. Wynn, Director: 9,832,370 Marc D. Schorr, COO, Director: 250,000 Linda Chen, Pres., Wynn Intl. Marketing, Director: 210,000 John Strzemp, Exec VP, Chief Administrative Officer: 195,000 Matt Maddox, CFO, Treasurer: 60,000 Kimmarie Sinatra, General Counsel, Secretary: 40,887 Source: SEC filings
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