Nov. 13 (Bloomberg) -- MGM Mirage, the casino company majority-owned by billionaire Kirk Kerkorian, said Chairman and Chief Executive Officer Terry Lanni will retire this month, as questions about his post-graduate education surfaced.

Lanni, 65, recommended that the board pick President and Chief Operating Officer Jim Murren, 47, to succeed him, the Las Vegas-based company said today in a statement.

“It’s time for a younger generation to take over,” Lanni said today in a telephone interview. He also cited a desire to spend more time with his family.

Asked by news organizations if he graduated with a master of business administration degree at the University of Southern California, as his company biography says, Lanni replied that he has an honorary MBA from the school. James Grant, a university spokesman, said Lanni had taken courses toward an MBA but wasn’t granted the degree. Grant said he couldn’t verify that the school gave him an honorary degree.

“If it needs to be corrected, it will be corrected,” Lanni said in today’s interview when asked about his biography. Spokesman Alan Feldman said in an e-mailed response to questions today that the discrepancy “had no bearing whatsoever on his decision to retire.” Lanni has a wife and two adult sons.

The discrepancy was uncovered by the Fraud Discovery Institute, a group co-founded by Barry Minkow, who served more than seven years in prison, from 1988 to 1995, after being convicted of fraud while running a company called ZZZZ Best Co.

Fraud Watcher

Minkow’s group tries to penetrate what it suspects to be possible fraud schemes, according to its Web site. Grant confirmed that Lanni earned a bachelor of science degree at USC.

Lanni served as chairman for more than 13 years, expanding the company from one property in Las Vegas to 17 resorts in the U.S. and internationally, the company said. Lanni oversaw MGM Grand Inc.’s combination with Mirage Resorts in 2000 and Mandalay Resort Group in 2005. The company had $7.69 billion in revenue last year.

MGM Mirage and investor Dubai World returned billions of dollars to shareholders through tender offers and share repurchases between August and May, after the government-owned entity took a stake in the company and bought 50 percent of the CityCenter project. The worsening credit crunch left MGM only able to then secure $1.8 billion of the $3 billion financing it needs to complete construction.

“Given what’s going on in the gaming business these days, I can’t blame the guy for wanting to spend more time fishing and on the golf course,” Robert LaFleur, an analyst with Susquehanna Financial Group LLP in Stamford, Connecticut, said today in a telephone interview.

No ‘Regrets’

“I really don’t have any regrets,” Lanni said. “This is the company that will be a survivor. I’m convinced. I believe it.”

MGM has been putting together a succession plan for almost two years, Feldman said.

“I simply believe that change is inevitable and this is the right time for me to do this,” Lanni said in a letter to staff today. “I have always believed that change is good. It provides opportunities for renewal and reinvigoration.”

Lanni will be leaving as MGM Mirage and other casino companies struggle with the worst financial crisis since the Great Depression. Investors have sent its shares down 87 percent this year as the company seeks to generate enough cash to cover loans and finish the $11.2 billion CityCenter project on the Las Vegas Strip.

The Strip, where MGM Mirage is the biggest operator, may post its largest annual gambling decline on record this year.

‘Never Seen’

“The economies are in a position that I’ve never seen before,” Lanni said. “Frankly, I think it’s a lot easier for a person in his 40s than a person in his 60s to comfortably deal with this.”

Murren, who has also served as finance chief, “fits the mold for the person with the most attributes and capabilities, in a very broad-based sense, to deal with this important function,” Lanni said.

MGM fell 16 cents to $10.61 at 7:11 p.m. in trading after the New York Stock Exchange closed.

To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net.

Last Updated: November 13, 2008 23:19 EST