Elaine Wynn’s Spat with Wynn Resorts Board Deepens Over Future of Company Director Jay Hagenbuch

Posted on: May 3, 2018, 10:30h. 

Last updated on: May 3, 2018, 09:31h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

The Wynn Resorts board has called on shareholders to reelect John Jay Hagenbuch as a director of the company, in direct defiance of its largest shareholder, Elaine Wynn.

Ms. Wynn has called for Hagenbuch’s head, claiming his loyalties lie too closely with her ex-husband, former chairman and CEO, Steve Wynn.

Ms. Wynn, who does not sit on the board, became Wynn Resorts’ largest shareholder last month, with 9.35 percent equity, after her former spouse, beset by allegations of sexual misconduct, sold his entire stake in the company.

She immediately demanded a reformation of the company’s governance structure, proposing sweeping changes to “restore the company’s reputation.” She said she wanted to nominate fresh blood, free of loyalty to either her, her husband, or the boardroom’s old guard.

She singled out Hagenbuch, who is one of three directors involved in Wynn Resorts’ own internal investigation of Mr. Wynn’s alleged behavior, a situation she said is inappropriate since the two men are old friends.

Post-Steve Power Struggle

On Tuesday Ms Wynn filed a lawsuit demanding a full list of company shareholders, whom she could urge not to vote for Hagenbuch’s reinstatement to the board at the company’s AGM on May 16. Wynn Resorts said it had now provided her with the requested information and asked her to drop the litigation, which it deemed an “unnecessary distraction.”

In a Wednesday filing to the Securities Exchange Commission, Wynn Resorts said Hagenbuch has made “important contributions” to the company over the past five and a half years.

Given Jay’s key board role and deep institutional knowledge, withholding your vote for him would only serve to undercut the progress Wynn is making,” the company said in a Wednesday filing.

The board has rebuffed Ms Wynn’s call to reopen the window to allow shareholders to nominate new directors. Instead, facing criticism that the board is “too male,” it nominated three women of its own choosing, whom shareholders will have the opportunity to elect at the AGM. The board has promised more changes to come.

Elaine Wynn Won’t Back Down

But Ms Wynn shows no sign of dropping her latest litigation against Wynn Resorts.

“The Company has stated that it will provide me with the shareholder lists I seek as ‘a sign of [its] good faith,’” she said in a SEC filing. “Acting in good faith would have been to provide the lists last week, as I requested. Instead, just hours after learning the litigation had been filed, the Company suddenly discovered the law and then admonished me for failing to communicate.

“In my view, the delay in sending me the shareholder lists has disadvantaged all shareholders, as the Company continues to pursue policies that seem to advance the interests of an entrenched board over shareholders,” she continued.

“This behavior is not emblematic of a ‘New Wynn.’ Instead, it shows that very little has changed at Wynn Resorts,” she concluded.