Sector: Consumer Discretionary
MONARCH CASINO AND RESORT INC · Meeting: May 27, 2026
Directors FOR
3
Directors AGAINST
1
Say on Pay
FOR
Auditor
FOR
Election of Directors
Against Analysis
John Farahi is the CEO and a director, and his brother Bob Farahi serves as President and Co-Chairman — a direct familial relationship with senior management that raises independence and oversight concerns under the voting policy; the TSR performance trigger does not apply because MCRI's 3-year price return of 39% is strong positive and the gap versus XLY (-19.9pp) falls well short of the 65pp threshold required to trigger a negative vote on TSR grounds.
For Analysis
Sullivan has served since 1998, is classified as independent, chairs the Audit Committee with SEC-recognized financial expertise (former CFO of Primadonna Resorts), met the 75% attendance threshold, holds no other public board seats that would trigger overboarding, and the TSR underperformance threshold is not met (gap of -19.9pp vs. XLY, well below the 65pp trigger for strong-positive absolute TSR).
Andrews is classified as independent, has served since 2014, brings relevant operations and marketing experience, met the 75% attendance threshold, holds no other public board seats that would trigger overboarding, and the TSR underperformance threshold is not met (gap of -19.9pp vs. XLY, well below the 65pp trigger for strong-positive absolute TSR).
Taitz joined the board effective January 1, 2026 — less than 24 months ago — and is therefore exempt from the TSR performance trigger under the voting policy; she is classified as independent, brings strong financial and capital markets expertise, and currently sits on four public company boards (Athene Holding, MidCap Finco Holdings, Summit Hotel Properties, and Yahoo!), which does not reach the five-board overboarding threshold.
Three of four nominees receive a FOR vote. John Farahi is flagged AGAINST solely due to the voting policy's familial relationship concern — he is CEO and his brother Bob Farahi is President and Co-Chairman, creating a close family tie at the very top of management that undermines independent board oversight. The other three nominees — Sullivan, Andrews, and new director Taitz — pass all applicable screens. The TSR performance trigger does not apply to any director because MCRI's 3-year price return of 39% is strong positive and the underperformance gap versus the XLY benchmark (-19.9pp) is far below the 65pp threshold required to fire a negative vote.
CEO
John Farahi
Total Comp
$3,610,936
Prior Support
N/A
CEO John Farahi received total compensation of $3,610,936 for 2025, consisting of a $750,000 base salary, a $225,000 cash bonus (30% of salary vs. the standard 20% target), and stock option awards valued at approximately $2,629,081 — meaning roughly 79% of his pay is variable and tied to stock price performance and financial results, well above the 50-60% variable pay minimum required by the policy. The elevated bonus (30% vs. the standard 20% target) was tied to measurable outcomes: Adjusted EBITDA beat the Board-set target by 1.4%, grew 10.4% year-over-year, the CEO absorbed additional responsibilities due to extended vacancies in key leadership positions, and the Atlantis hotel renovation was successfully completed — these represent clear, documented performance rationale rather than discretionary inflation. The company has a Dodd-Frank-compliant clawback policy adopted in 2023, stock options are granted at market price with multi-year vesting (3 years minimum), and the pay-for-performance alignment check is satisfied: MCRI's stock returned 33.9% over the past year and 39% over three years, shareholders have experienced meaningful positive returns, and there is no evidence of incentive pay decoupled from outcomes.
Auditor
Deloitte & Touche LLP
Tenure
2 yrs
Audit Fees
$647,613
Non-Audit Fees
$43,981
Deloitte was retained starting in the second quarter of 2024, giving it a tenure of approximately two years — well below the 25-year threshold that would trigger concern. Non-audit fees (tax services of $43,981) represent only about 6.8% of audit fees ($647,613), comfortably below the 50% threshold. Deloitte is a Big 4 firm and fully appropriate for a company of MCRI's $1.8B market cap. No restatements or other red flags are present.
The 2026 Monarch Casino & Resort annual meeting presents two standard management proposals and a four-person director slate. The auditor ratification and say-on-pay vote both pass all policy screens and receive FOR votes; Deloitte is newly appointed with a clean fee profile, and executive pay is predominantly variable with documented performance linkage. Three of four director nominees also receive FOR votes, but CEO John Farahi receives an AGAINST vote solely because his brother Bob Farahi serves as President and Co-Chairman — a direct familial relationship at the top of management that the voting policy treats as a governance concern independent of stock performance, which is itself strong (39% over three years).
