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Schrager Checks Out, Cashes In

The perky ex-hotelier.

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Ian Schrager left the Morgans Hotel Group Co. in June, but it will still be paying him—potentially more than $4 million—through the end of 2007. The perk-laden consulting deal Schrager received after he resigned as chairman and CEO includes a guaranteed $1.25 million in 2006–7, with the possibility of another $1.25 million in bonuses as well as a guaranteed $750,000 reimbursement for use of private aircraft, regardless of actual usage. He also gets a company-leased car; a full-time driver plus a full-time secretary; free rooms at any of the group’s nine hotels (including the Royalton and Hudson here, the Mondrian in L.A., the Delano in Miami, and the Sanderson in London) for him, his immediate family, and anyone else deemed in the company’s interest; and full medical. All that, and no noncompete clause. The terms of Schrager’s deal are disclosed in the registration statement for Morgans Hotel Group’s proposed $350 million IPO. One hopes that Schrager’s consulting will help guide Morgans through: The filing shows it carries $659.9 million in debt and that it lost $23.8 million in 2002, $42.5 million in 2003, $31.6 million in 2004, and $29.1 million over the first three quarters of 2005.

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