"Convicted tax evader and former Studio 54 king
Ian Schrager walked away from yesterday's IPO of Morgans Hotel Group a
wealthier man even though he's no longer the head of the luxury hotel
operator.

Schrager, who opened the first Morgans hotel in New York in 1983, controls investment firm RSA Associates, which received about $19.5
million by selling various securities in the IPO, according to public documents.

The firm retains a 6.4 percent stake in the now-public company valued
at roughly $46 million.

Last June, Schrager stepped down as chief executive of Morgans and secured a lucrative two-and-half year consulting gig from the company.

As part of his contract, the hotelier received a pro-rated base salary of $1.07 million and a $1 million bonus for about six months of service last year.

This year, he'll take in $750,000 plus up to another $750,000 in
bonuses. In 2007, Schrager gets $500,000 plus up to $500,000 in bonuses
based on Morgans' performance.

Schrager will also receive a bunch of perks including reimbursements
for business and entertainment expenses, use of a private plane, a car
and driver, a full-time secretary and complimentary rooms at any of the
Morgans hotel properties for him and his immediate family members.

From June through September last year, Schrager got $83,631 in
reimbursements plus $125,000 for fly time in his private jet.

Some market watchers and analysts cautioned investors that the perks
and consulting arrangement showed poor judgment on the part of Morgan's
board of directors, its new chief executive W. Edward Scheetz and
Chairman David Hamamoto.

Schrager served more than a year in prison after being convicted of
tax evasion in 1979 for hiding his cocaine-fueled club's revenue. Aside
from his consulting gig with Morgans, Schrager is busy sprucing up the
venerable Gramercy Park Hotel.

Morgans operates nine upscale boutique hotels in big cities such as
Los Angeles and Miami. The company is also developing two hotels in Las
Vegas.[Via Nypost.com]