IGT’s board doesn’t look far for CEO
When International Game Technology began thinking about a new president and chief executive officer, the company’s board wanted someone who would bring fresh perspective but someone who also knew the company well.
Even before a formal search process got under way, the board found their woman Patti S. Hart, a director of the Reno-based maker of gaming systems since 2006.
She’ll take the reins Wednesday, succeeding TJ Matthews, who resigned as president and CEO but remains with the company as chairman of the board.
The 43-year-old Matthews told investment analysts that he wants to spend more time with his young family. He said leadership of IGT “requires an extraordinary amount of your time and your effort.”
And the pressures have grown in recent months as consumers spend less money with the networked systems of gaming machines that IGT operates, and casino operators scale back their plans for purchases of slots.
Efforts to groom an internal successor to Matthews hadn’t worked out, and the IGT board had begun thinking about a strategy to recruit fresh leadership from outside the company.
During those conversations, Matthews said, the board recognized that Hart has the skills that IGT needs.
The 52-year-old Hart is the former chairman and chief executive officer of Pinnacle Systems Inc., a maker of video-editing software, and also held executive positions with the telecommunications company Sprint.
She’ll earn a base salary of $800,000 a year as president and CEO of IGT, and can earn up to $1.92 million in annual bonuses if the company reaches targets set by the board. Hart also received a grant of 175,439 restricted shares of IGT stock and options to purchase another 661,704 shares. The stock was trading at about $10 a share late last week.
As chairman, Matthews will make a base salary of $840,000 a year with the opportunity to earn another $2.5 million in annual bonuses. He earned $3.85 million in salary, bonus and stock-based compensation in the company’s last fiscal year, IGT said in a filing with the Securities and Exchange Commission in January.
Hart said she doesn’t plan revolutionary change. Instead, she’ll spend the next 90 days learning more about the company. Then, she said, change at IGT will most likely reflect refinement of the company’s current strategies.
Hart noted that her professional experience has come in the application of technology, experience that fits well with IGT’s business. She said her management strategy is driven by a desire to surround herself with good people, then trust them to make good decisions that move the company forward.
The new president and CEO said she doesn’t expect to fill the vacant post of chief operating officer at IGT for a while. Instead, Hart said, she wants to learn more about operations first hand and will fill the operations role herself.
An analyst with Goldman Sachs noted that Hart isn’t well known in the gaming industry. That’s a negative for the company, as Matthews was well regarded by customers and investors alike, analyst Steven Kent said
in a note to clients.
Matthews called the timing of the announcement “bittersweet.”
During his six-year run as IGT’s top executive, the company’s sales boomed with the advent of cash-in, cash-out slot machines and the opening of numerous new gaming properties across the United States.
On the other hand, IGT in recent months laid off about 10 percent of its workforce, reduced its quarterly dividend to 6 cents from 14.5 cents and dampened investors’ expectations about its growth prospects in the next year.
With 2,836 employees at its South Meadows facilities, IGT is the largest private sector employer in northern Nevada, and it’s the largest manufacturing company in Nevada.
The commission, which advises the governor and Nevada Legislature in areas such as career advancement, pay equality and gender discrimination, could fall victim to looming budget cuts.