John Hagenbuch voted to remove Elaine Wynn from the board in 2015.
Elaine Wynn, the co-founder of Wynn Resorts and its current largest shareholder, wants to remove inside director John Hagenbuch from Wynn Resorts’ board of directors. Hagenbuch currently is overseeing an internal investigation into sexual misconduct allegations.
As Bloomberg News reported this week, the potential ouster of John Hagenbuch could become a sign of the next wave of controversies at Wynn Resorts — executives whose close ties to Steve Wynn could become a liability. The Bloomberg report suggested such ties might be trouble for Wynn Chairman Boone T. Wayson, among others.
Elaine Wynn said in a filing that John Hagenbuch is “too closely aligned” with her former hubsand. Elaine Wynn is withholding her votes for John Hagenbuch’s return to the board, which Hagenbuch has served on since 2012.
John Hagenbuch’s Role at Wynn Resorts
Hagenbuch is a real estate investor from Ketchum, Idaho, where company founder and former CEO Steve Wynn vacationed for years. The Idaho investor’s inclusion on the board in 2012 was one of several moves which led to Elaine Wynn’s ouster from the board in 2015. Three years later, the situation has reversed.
Elaine Wynn is the company’s top shareholder and is wielding influence to remake the board.
She said in a letter to Wynn shareholders this week, “I am deeply concerned by what I view as the lack of independence and responsible oversight demonstrated by the current board of directors. My opposition to Mr. Hagenbuch’s re-election serves as a referendum on all of the longstanding legacy directors.”
Wynn’s Longstanding Legacy Directors
If John Hagenbuch’s return to the board is a referendum on the other longstanding legacy directors, then the upcoming vote could mean the entrenchment or ouster of them all. Until Steve Wynn’s resignation from Wynn Resorts in early March, their support was absolute and without question. Now that unquestioning support is a source of vulnerability for those most closely associated with Steve Wynn.
Steve Wynn, who resigned from his role as CEO in early-March due to a series of allegations that he harassed or assaulted women. In one case, it was learned that Steve Wynn paid $7.5 million to one accuser in 2005. Steve Wynn has denied all the allegations and at one time suggested they were a part of his bitter 2011 divorce with Elaine Wynn.
Elaine Wynn’s Company Shares
Bitter sounds like an understatement. Elaine Wynn sat on the Wynn Resorts board of directors for years after their divorce, because she owned $1.6 billion of Wynn shares and was a top shareholder. A shareholders agreement assured she could not sell her shares without Wynn Resorts board’s approval.
Eventually, Steve Wynn’s allies in the company voted Elaine Wynn off the board in 2015. She countered by filing a lawsuit stating undisclosed misconduct on the part of Steve Wynn. Elaine Wynn’s lawyers argued she was a whistleblower in the lawsuit, which was intent on freeing Elaine Wynn’s shares in the company.
Steve Wynn’s Rise and Fall
The lawsuit appeared to go against Elaine Wynn, while Steve Wynn’s fortunes appeared to rise. After Donald Trump became president, Steve Wynn was named as one of 20 members of the Inauguration Planning Committee. In spring 2017, he was named the chairman of the RNC Finance Committee.
His prominence in politics might have led to an increased level of scrutiny. The Wall Street Journal, owned by Rupert Murdoch, released an article in January 2018 which alleged sexual misconduct by Steve Wynn.
Wall Street Journal Allegations
The WSJ article’s writers interviewed 150 current and former Wynn Resorts employees. Multiple salon workers in Wynn’s Las Vegas Strip resorts claimed he sexually harassed them. Many had similar stories, including offers of money for sexual favors, conversation about off-color topics, and tactics used to avoid being along with Mr. Wynn.
The Wall Street Journal allegations led to a new wave of scrutiny, as the British tabloids began to dig up stories of Steve Wynn’s conduct over the years. Regulators in Nevada, Massachusetts, and Macau opened investigations into the charges, while Wynn Resorts shares lost value on the New York Stock Exchange and Hong Kong Stock Exchanges.
Steve Wynn Divests
The whirlwind of scandals and resultant bad news for Wynn Resorts led to Steve Wynn’s resignation. Wynn Resorts since came to accommodations with Elaine Wynn and Kazau Okada — who also had a large stake in the company held up in court — which allowed Steve Wynn to divest himself of $3 billion in company shares. That left Elaine Wynn as the top shareholder in the company.
Earlier this month, Steve Wynn filed a defamation lawsuit against the Associated Press, an AP reporter, and one of his accusers cited in an AP article which accused him of a 1973 rape. Steve Wynn’s lawyers argued that the AP left out key parts of a police report they cited in the article which would have undercut the allegations made in the article. The accuser made some outrageous, easy-to-disprove claims in the police report, which Steve Wynn claims is proof the AP published its report “in malice”.
