Maddox Sells 56,000 Shares of Wynn Stock, Cashing Winning Bet on Company Equity
Posted on: January 5, 2021, 12:33h.
Last updated on: January 5, 2021, 01:02h.
Wynn Resorts (NASDAQ:WYNN) CEO Matt Maddox recently sold about 56,000 shares of the company’s stock. Maddox was taking some profits after a tumultuous year in which the gaming name sagged due to the coronavirus pandemic, then proceeded to more than triple from its March nadir to its December highs.
In a Form 4 filing with the Securities and Exchange Commission (SEC), it was revealed that in two transactions on Dec. 30, Maddox unloaded a combined 50,000 shares. Another transaction dated Jan. 1 confirms the disposal of 5,966 shares of Wynn stock. That sale likely occurred on Dec. 31 because US markets were closed on Jan. 1 for the New Year’s Day holiday.
His sale of those shares represents a winning bet the executive made on himself and the company. At the height of the first wave of COVID-19 cases in March, gaming equities, including Wynn, were being savagely repudiated by market participants. The Encore operator revealed Maddox would forego 100 percent of his 2020 cash salary, opting to be compensated entirely in equity.
Other Wynn executives and some board members followed suit, taking cash salary reductions ranging from 33 percent to 100 percent in exchange for stock.
Under the terms of Maddox’s current employment agreement with the gaming company, he’s to be awarded 100,000 shares of restricted stock if certain benchmarks are met. These shares cannot be immediately sold. Company policy states he must attain equity ownership equaling six times his annual salary, which was $1.90 million in 2018.
Maddox sold 21,645 shares at an average price of $112.94, and another 28,355 at an average price of $113.42 on Dec. 31. The 5,966-share transaction dated Jan. was at an average price of $112.83, according to the SEC document. All told, the chief executives trimmed his Wynn stake by about eight percent, hauling in $6.32 million in the process.
His timing was arguably impeccable and he’s still holding plenty of shares — 394,549 to be precise, according to Form 4 — with which to benefit from an ongoing rebound in the stock this year – a scenario plenty of analysts are betting on.
At the start of the fourth quarter, Wynn stock traded around $70 but gained more than 60 percent over the last three months of 2020.
More Sales Possible
Equity sales by company insiders aren’t unusual and occur for a variety of reasons. Many of which are plausible and not negative or indictments of a firm’s prospects.
In Maddox’s case, the recent share disposals are understandable because he went without the cash salary for more than nine months last year.
Broadly speaking, Wall Street is bullish on Wynn for 2021, so it’s possible more directors and executives that took reduced 2020 salaries in exchange for equity will sell some of those shares this year.
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