Elaine Wynn Gains an Edge in Bid to Oust Jay Hagenbuch from Wynn Resorts Board

Posted on: May 7, 2018, 03:00h. 

Last updated on: May 7, 2018, 02:54h.

Elaine Wynn appears to have the upper hand in her running battle with Wynn Resorts to oust John Jay Hagenbuch from the board of directors.

Elaine Wynn Gains an Edge in Bid to Oust Jay Hagenbuch
Elaine Wynn believes that Jay Hagenbuch, as a loyal friend of her ex-husband, represents the entrenched old guard at Wynn Resorts and should not be reelected to the board. Two firms appointed to advise shareholders agree with her. (Image: TripSavvy)

On Friday and Saturday, two influential advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis (GL), recommended company shareholders do not reelect Hagenbuch to the board at the Wynn Resorts’ upcoming AGM on May 16.

Ms. Wynn claims Hagenbuch’s loyalty to her ex-husband, Steve Wynn, makes him unsuitable as a director. Mr. Wynn resigned as chairman and CEO of the company in the face of sexual misconduct allegations.

Ms. Wynn has demanded a “reconstitution” of the board and sweeping changes to corporate governance as the company seeks to restore its battered reputation.

Steve Wynn Loyalist

The 76-year-old has been engaged in litigation with Wynn Resorts, a company she co-founded with her ex-husband, on and off since 2012, but the situation escalated in 2015 when the board backed a resolution led by Mr. Wynn to oust her as a director.

Mr. Wynn denies the sexual misconduct allegations against him and blames them on a “smear campaign” spearheaded by Ms. Wynn, an accusation she denies.

ISS said on Saturday that Hagenbuch was “part of a legacy board that oversaw material failures in governance and risk oversight” and that his presence on the board does “not seem to outweigh the risks associated with permanence.”

The previous day, GL said it was ultimately “inclined to conclude there may be greater value in effectively objecting to Mr. Hagenbuch’s nomination, which should be considered against his questionable role on the special committee reviewing accusations against Mr. Wynn and his shared culpability for years of misaligned compensation practices that Glass Lewis continues to believe are problematic.”

Hagenbuch is one of three directors up for re-election at the AGM, but the only long-term board member on the ballot.

Elaine Sues Again

Ms. Wynn found herself the majority shareholder of Wynn Resorts when Mr. Wynn sold his stake in the company in March. She was quick to demand changes, which have been rebuffed by the board.

The board has, however, nominated three women to the ballot for possible election on May 16 – a reaction to claims women have been underrepresented in top positions within the company.

As is her wont, Ms. Wynn sued Wynn Resorts last week, claiming the board had failed to deliver a list of the contact details of all shareholders so she could canvass against Hagenbuch. The board has since provided the list, but Ms. Wynn has refused to drop the suit because she said the delay had “disadvantaged all shareholders.”

The board “continues to pursue policies that seem to advance the interests of an entrenched board over shareholders,” she wrote in a filing to the Securities and Exchange Commission last week.