Elaine Wynn Launches Campaign to Remove Director From Casino’s Board

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Elaine Wynn,

who co-founded the corporate with Mr. Wynn, her ex-husband, mentioned in a Securities and Change Fee submitting on Monday that shareholders shouldn’t vote to re-elect director

John Hagenbuch

to the board based mostly on what she alleges are shut ties to Mr. Wynn; she additionally cited as a problem the director’s involvement in deciding govt pay, which has lengthy been a topic of criticism from corporate-governance consultants.

The transfer got here after the on line casino operator final week rebuffed Ms. Wynn’s name for the board—on which she beforehand served—to overtake its membership to comprise principally new administrators. The corporate mentioned it as an alternative had chosen so as to add three girls to its board, for a complete of 4 girls and 7 males.

A Wynn Resorts spokesman mentioned the corporate “is targeted on the longer term” and the board “is working in an orderly trend to refresh its composition” and “intends to proceed its work.”

Ms. Wynn mentioned within the submitting that she wouldn’t vote for Mr. Hagenbuch’s re-election on the firm’s annual assembly Might 16 and that neither ought to different shareholders.

Given Mr. Hagenbuch is a “longtime shut pal” of Mr. Wynn’s, it’s “disconcerting” that he’s concerned within the investigation into allegations in opposition to him, mentioned Ms. Wynn within the submitting. “I discover this apparent battle deeply troubling,” she wrote. Mr. Hagenbuch and fellow director

Jay Johnson

are a part of a particular, three-member committee of the board led by director

Patricia Mulroy

to analyze the claims.

Property data present that each Messrs. Hagenbuch and Johnson personal properties in Idaho’s Solar Valley resort space, the place Mr. and Ms. Wynn have been vacationing for years.

A consultant for the particular committee referred inquiries to Wynn Resorts’ spokesman. A lawyer for Mr. Wynn mentioned he “doesn’t want to touch upon any people who could also be a part of the Solar Valley neighborhood.”

Mr. Wynn resigned from his roles as the corporate’s chairman and CEO in February and final month bought off his whole 12% stake for $2.1 billion.

The exit got here after a January article in The Wall Road Journal detailed allegations that Mr. Wynn had engaged in sexual misconduct in opposition to staff for many years, and that he paid $7.5 million to a manicurist at his Wynn Las Vegas resort who in 2005 informed folks Mr. Wynn had pressured her to have intercourse with him. Ms. Wynn mentioned in a latest court docket listening to that a rape allegation had been made in opposition to Mr. Wynn along side the 2005 incident.

Mr. Wynn has mentioned it’s “preposterous” that he would assault a girl; he hasn’t responded to different allegations of sexual misconduct. In response to earlier articles, an legal professional for Mr. Wynn has despatched a press release on his behalf saying he “declined to take part in The Wall Road Journal’s reporting as a result of it’s clear that the Journal has no intention of treating him pretty.”

The legal professional, Lin Wooden, mentioned Monday that his consumer doesn’t need to touch upon the specifics of Ms. Wynn’s submitting.

Although Mr. Wynn not owns shares in Wynn Resorts, the board committee in addition to state regulators in Nevada and Massachusetts—the corporate is constructing a $2.5 billion on line casino within the Boston space—are persevering with to analyze the allegations.

The Massachusetts Gaming Fee has mentioned it’s wanting into who was informed of Mr. Wynn’s alleged habits and what, if something, they did in response. The regulator has mentioned the corporate didn’t disclose the allegations associated to the 2005 settlement involving the manicurist earlier than the fee granted Wynn Resorts a license in September 2014, or at any level earlier than the Journal report. The corporate has mentioned that the applying course of didn’t ask for disclosure of that kind of knowledge. The regulator can revoke the Wynn license if it determines the corporate isn’t appropriate as a on line casino operator.

Ms. Wynn, who owns a 9% stake within the firm, mentioned that one among her issues is that Wynn Resorts may half with the Wynn Boston Harbor challenge for lower than it’s price in an effort to quash the regulatory investigation. “I concern that longstanding legacy administrators comparable to Mr. Hagenbuch, who’ve shut private ties to Mr. Wynn, will endorse simply such short-sighted motion,” she wrote.

A reconstituted board stacked with a majority of recent, unbiased administrators ought to be in place earlier than the corporate makes any choices that would damage long-term shareholder worth, she mentioned within the submitting.

Ms. Wynn mentioned within the submitting that Mr. Hagenbuch was additionally partly answerable for the criticisms the corporate has obtained from corporate-governance consultants relating to its beneficiant executive-pay packages given his function on the board’s compensation committee.

Ms. Wynn wrote that an “exorbitant” pay bundle just lately authorised for

Matt Maddox,

the corporate’s new chief govt, exhibits “little or no has modified” on the firm.

A submitting launched final week confirmed Mr. Maddox was awarded 200,000 shares of firm inventory price $19.2 million final yr, earlier than he was named CEO. Mr. Maddox could be eligible to obtain a portion of that cash subsequent yr if he meets sure efficiency targets; the inventory would totally vest in November 2021.

The board gave Mr. Maddox a further 50,000 shares after he took over as CEO in February, in accordance with filings.

An organization spokesman mentioned the inventory awards final yr have been a part of a renewal of Mr. Maddox’s employment contract, and that his earlier long-term inventory grants had expired. He added that a third-party marketing consultant employed by the corporate discovered that Mr. Maddox’s compensation was in keeping with a gaggle of different on line casino, resort trade and trend CEOs.

The Wynn Resorts board has lengthy been criticized for corporate-governance weaknesses and shut ties to Mr. Wynn.

Outdoors proxy-advisory companies for years have criticized the corporate’s executive-compensation practices as “problematic” and “extreme.” In 2015 Institutional Shareholder Providers really helpful that shareholders withhold assist from the 2 administrators nominated for re-election that yr, citing an “general corporate-governance profile that ranks among the many worst, not one of the best, of U.S. firms.” Glass, Lewis & Co., one other proxy advisory agency, has given the corporate an “F” grade for its pay-for-performance practices the previous two years.

The corporate and board have beforehand declined to touch upon the previous criticism besides to say the board “considerably restructured” Mr. Wynn’s compensation in 2014, decreasing his base wage and curbing some advantages comparable to a housing allowance and entry to company plane for private use.

Write to Kate O’Keeffe at kathryn.okeeffe@wsj.com, Chris Kirkham at chris.kirkham@wsj.com and Jim Oberman at Jim.Oberman@wsj.com

Supply hyperlink – https://www.wsj.com/articles/elaine-wynn-launches-campaign-to-remove-director-from-casinos-board-1524481662?mod=pls_whats_news_us_business_f

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