Elaine Wynn suggested a sell of Encore Boston Harbor would be a decision to protect board members — not help the company’s bottom line.
Elaine Wynn, the largest shareholder of Wynn Resorts at the moment, is planning an investors revolt at a May 16 shareholders meeting. The issues at stake are whether the Wynn Resorts board of directors should continue to be controlled by friends of disgraced former CEO, Steve Wynn, and whether those board members are making finanial decisions for the company based on protecting themselves — instead of enriching shareholders.
The May 16 shareholders meeting centers around a proxy fight over whether outside director John Hagenbuch should be reelected to the board. John Hagenbuch is a Montana-based real estate mogul who became friends with Steve Wynn during Wynn’s many years vacationing in Hagenbuch’s corner of Montana.
Elaine Wynn sent a letter to shareholders stating there is no reason besides loyalty to Steve Wynn to keep Hagenbuch. Three proxy advisory firms backed Elaine Wynn’s contention that investors should withhold support. Various media sources suggest that Elaine Wynn is courting investors to block the reelection of John Hagenbuch.
Seeks Removal of John Hagenbuch
The Hagenbuch issue is a symbol of a wider battle Elaine Wynn is fighting with the board of directors. She believes that CEO Matt Maddox, a Steve Wynn protege, and chairman Boone Wayson, a personal friend of Steve Wynn’s, are too closely identified with Steve Wynn.
Matt Maddox and Boone Wayson have signaled interest in sell the Encore Boston Harbor (Wynn Boston Harbor), a $2.4 billion integrated resort the company so far has paid $1.3 billion in constructions fees to complete. Set for a grand opening in 2019, the Encore Boston Harbor will be the first-ever Boston-area land-based casino. As such, it should be a massive revenue generator.
For that reason, Elaine Wynn has pinpointed the potential sale of Encore Boston Harbor to criticize the current Wynn Resorts board. Elaine Wynn and her allies contend that the board wants to sell the lucrative Boston casino for personal reasons instead of business reasons — to avoid the scrutiny of a Massachusetts Gaming Commission probe into what the board knew about Steve Wynn’s misconduct over the years.
“Restore Wynn”
The charges are part of an overall campaign, called “Restore Wynn”, to remake the board of directors in a post-Steve Wynn era. Elaine Wynn said she created the Restore Wynn campaign, because Wynn Resorts “needs and deserves a new board that is truly independent and wholeheartedly committed to the company’s long-term success.”
Elaine Wynn served on the board until the same members forced her out in April 2015, at the behest of her ex-husband, Steve Wynn. That led to a lawsuit by Elaine Wynn to gain control of her 9% stake in Wynn Resorts, which she was not allowed to sell without board permission. The board and Steve Wynn played hardball and — it can be said — the decision backfired. The decision to remove Elaine Wynn led to a lawsuit which, at least according to the former CEO himself, caused the downfall of Steve Wynn.
Steve Wynn claims the sexual allegation charges are fabrications, but he said they stem from his longstanding dispute with his former wife and the lawsuit she brought against the company. The allegations first appeared a January 2018 Wall Street Journal article which talked to 150 current and former Wynn Resorts employees. Multiple of those interviewed claimed a pattern of harassment by the chief executive, especially Wynn Las Vegas salon workers, who said the boss sexually harassed them.
Tuna Amobi of CFBA Research said the timing of the charges had a huge role in Steve Wynn’s fall from power. Amobi said they might give additional force to Elaine Wynn’s current Resort Wynn campaign. Amobi said, “Elaine’s campaign goes way, way back — and the sexual harassment allegation probably gives her another platform to maybe get some of her previous grievances out.”
Blocked by Wynn Resorts Board
So far, Wynn’s Board of Directors is unswayed by the campaign. Elaine Wynn requested to speak to the company’s three new all-female board members in a private meeting, but was rebuffed by the board. The board replied that Elaine Wynn could meet with the three — Betsy Atkins, Dee Dee Myers, and Wendy Webb — but the meeting had to take place in the presence of Wynn Resorts’ full board.
Also, that meeting could not take place until after the May 16 shareholders meeting, when John Hagenbuch’s role on the board would be decided. For certain, the board does not want Elaine Wynn swaying the opinion of the three female members of the board, who have no ties and no loyalty to John Hagenbuch.
Elaine Wynn to Boone Wayson
Elaine Wynn decided to use the refusal to further the narrative of the Restore Wynn campaign. She released an open letter to Boone Wayson, stating, “Your rejection of my perfectly reasonable request starts with the fiction that good governance requires that I meet with the entire board and the CEO at the same time. It seems that they ought to have time to meet with the Company’s largest shareholder before the annual meeting.”
The battle lines appear set for the annual shareholders meeting, which takes place in only a few days. The future of Wynn Resorts’ board of directors, and the direction of the company, hangs in the balance.
