PNK » Topics » Philosophy and Objectives

This excerpt taken from the PNK DEF 14A filed Apr 15, 2009.
Philosophy and Objectives
 
The key objectives of our compensation programs are to attract, retain and motivate well-qualified executives who will support the rapid growth and development of our Company in a dynamic industry. We assembled our current team of key executives several years ago (other than Mr. Ruisanchez who we hired in August 2008) and, under their leadership, we have experienced significant profit improvement from our existing operations. We have also completed or are undertaking major projects in St. Louis county, Missouri; Lake Charles, Louisiana; and Baton Rouge, Louisiana, involving significant capital expenditures over the next several years. We believe that continuity of our management team is important to ensure the successful completion of these projects and for our Company to continue to seek, obtain, finance, design, build, open and operate other successful properties. It is therefore important to motivate, retain, and reward our executives commensurate with their success.
 
More specifically, our programs are designed to:
 
  •  Position Executive Pay Commensurate with Performance. We seek to pay at competitive median levels of compensation for median performance, well above competitive levels for outstanding achievement, and well below competitive levels for poor performance over a multi-year time horizon;
 
  •  Provide Superior Upside Opportunity. We encourage high-performing and valuable executives to stay with the Company over the long-term through highly leveraged incentives, with an emphasis on superior rewards for superior performance. We believe that this high-risk, high reward approach to compensation is attractive to successful and highly qualified executives; and
 
  •  Provide Tax-Efficient Savings Vehicles to Executives. As allowable under the law, we believe that providing our executives with attractive and tax-effective opportunities to save their compensation under non-qualified deferred compensation programs enhances their ties to the Company; minimizes potential distractions caused by concerns over long-term income security; and improves the Company’s available cash flow for further investment to enhance stockholder value.
 
We do not allocate between cash versus non-cash compensation and short-term versus long-term compensation based on specific percentages. Instead, we believe that the compensation opportunity for executives should be generally in line with the prevailing market when evaluated over the long-term, and that performance incentives should be more heavily weighted than base salaries and other fixed components of compensation.
 
This excerpt taken from the PNK DEF 14A filed Apr 16, 2008.

Philosophy and Objectives

 

The key objectives of our compensation programs are to attract, retain and motivate well-qualified executives who will support the rapid growth and development of our Company in a dynamic industry. We assembled our current team of key executives several years ago and, under their leadership, we have experienced significant profit improvement from our existing operations. We have also completed or are undertaking major projects in St. Louis city and county, Missouri; Lake Charles, Louisiana; Baton Rouge, Louisiana; and Atlantic City, New Jersey, involving significant capital expenditures over the next several years. We believe that continuity of our management team is important to ensure the successful completion of these projects and for our Company to continue to seek, obtain, finance, design, build, open and operate other successful properties. It is therefore important to motivate, retain, and reward our executives commensurate with their success.

 

More specifically, our programs are designed to:

 

   

Position Executive Pay Commensurate with Performance. We seek to pay at competitive median levels of compensation for median performance, well above competitive levels for outstanding achievement, and well below competitive levels for poor performance over a multi-year time horizon;

 

   

Provide Superior Upside Opportunity. We encourage high-performing and valuable executives to stay with the Company over the long-term through highly leveraged incentives, with an emphasis on superior rewards for superior performance. We believe that this high-risk, high reward approach to compensation is attractive to successful and highly qualified executives; and

 

   

Provide Tax-Efficient Savings Vehicles to Executives. As allowable under the law, we believe that providing our executives with attractive and tax-effective opportunities to save their compensation under non-qualified deferred compensation programs enhances their ties to the Company; minimizes potential distractions caused by concerns over long-term income security; and improves the Company’s available cash flow for further investment to enhance stockholder value.

 

We do not allocate between cash versus non-cash compensation and short-term versus long-term compensation based on specific percentages. Instead, we believe that the compensation opportunity for executives should be generally in line with the prevailing market when evaluated over the long-term, and that performance incentives should be more heavily weighted than base salaries and other fixed components of compensation. 

 

This excerpt taken from the PNK DEF 14A filed Apr 10, 2007.

Philosophy and Objectives

 

Attracting, retaining and motivating well-qualified executives is essential to the success of any company. This is particularly the case with us, as we are experiencing rapid growth in a dynamic industry. We have assembled our current team of key executives within the past few years. Under their leadership, we have experienced significant profit improvement from our existing operations. We have also completed or are undertaking major projects in Lake Charles, Louisiana; Baton Rouge, Louisiana; Atlantic City, New Jersey; and St. Louis city and county, Missouri, involving aggregate capital expenditures likely to be over $3 billion over the next 4 to 5 years. We believe that it is important to motivate and retain the current key management team to ensure the successful completion of these projects and for our company to continue to seek, obtain, finance, design, build, open and operate other successful properties.

 

The gaming industry is highly competitive and has a limited number of highly qualified executives. It is a very specialized industry, requiring diverse skills. Executives and their families undergo a very high level of public and regulatory scrutiny. Our company competes with many other public gaming companies for executive talent, including several companies with significantly greater resources. We also compete for talent with private gaming companies, private equity firms investing in gaming, and Native American casinos. Under existing tax laws, private equity firms and Native American casinos are able to compensate executives in a more tax-efficient manner than we and other public gaming companies can.

 

In light of the highly competitive market for top executive talent in the gaming industry, the goals of our compensation program are to provide significant rewards for successful performance, and to encourage retention of top executives who may have attractive opportunities at other companies.

 

Internal Revenue Code Section 162(m) generally disallows a tax deduction to public companies for compensation over $1 million paid to each of the company’s chief executive officer and the four other most highly compensated officers, except for compensation that is “performance based.” Our general intent is to design compensation awards to our named executive officers so that the awards will be deductible without limitation. However, we may make compensation awards that are not deductible if our best interests so require. Our bests interests do not usually require that compensation to our executives be deductible. In most recent years, we have not had to pay income tax due to loss carryforwards, tax depreciation (particularly from new properties) and financial leverage. We believe that our new properties and the financial leverage resulting from their construction will result in much of our cash flow from operations not being subject to current income taxation over the next few years. Eventually, however, we do expect to incur federal income taxes as our new properties mature and our leverage decreases.

 

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