Elaine Wynn Settles Suit, Influences New Board Appointments
Elaine Wynn last week dropped a six-year old lawsuit against Wynn Resorts, the former CEO and ex-husband Steve Wynn and corporate General Counsel Kim Sinatra. A statement from Steve Wynn said that he “has resolved all outstanding legal issues with his former wife, Elaine Pascal Wynn. Mr. Wynn expressed gratification that he was able to put all of the personal unpleasantness of the last few years between he and Ms. Wynn behind him.”
After the sale of equity owned by Steve Wynn and the resolution of a suit with former shareholder Universal Entertainment of Japan, Elaine Wynn is the largest shareholder in the company, owning 9.26 percent equity. The lawsuit began when Elaine Wynn was ousted as a as a director in 2015, a move she claimed was orchestrated by her ex-husband when she complained about restrictions on her selling her shares without the approval of Steve Wynn. The stipulation was resolved last month.
Meanwhile—and possibly influenced by the withdrawal of the lawsuit—Wynn Resorts has named three new members to the board of directors, all women, as the embattled casino giant strives to turn the page on the sexual harassment scandal that toppled founder and industry icon Steve Wynn.
The three are Dee Dee Myers, executive vice president for worldwide communications and public affairs at Warner Bros. Entertainment; Betsy Atkins, a three-time CEO and corporate governance advocate; and Wendy Webb, CEO of Kestrel Advisors, which advises corporations on growth initiatives, governance, investor relations and strategic issues.
The appointments are the first in what many expect to be an overhaul of the board following Wynn’s resignation as chairman and chief executive. Wynn quit in February in the wake of a flood of accusations by women who worked for the company’s Las Vegas resorts that he pressured them to perform sexual favors.
Two longtime directors, Ray Irani and Alvin Shoemaker, have since stepped down, with Shoemaker leaving when his term ends in 2019. Another director, J. Edward Virtue, plans to leave in May.
In a letter to the board prior to the new appointments, Elaine Wynn had called for a restructuring of the board and reopening the nomination period to add new members. Her voice is expected to carry a lot of weight in the likely event of a shakeup, and sources tell GGB News that Sinatra is likely to depart soon, possibly followed by CEO Matt Maddox.
“Because all of the candidates I nominate would, by definition, be new to the board, they would not be in a position to have their independence questioned due to excessively long tenure—unlike some of the incumbent directors who have served for over 15 years,” she said in the letter.
Maddox, said the additions represent “meaningful change” for the company.
“These appointments signify a turning point for us, and I look forward to working with each of our new directors as we usher in a new era at Wynn.”
Maddox’s tenure has seen the creation of in-house initiatives to promote gender equality and inclusion and ensure a safe workplace for employees. But questions remain whether Sinatra and/or Maddox knew about a $7.5 million settlement with a former employee who Steve Wynn allegedly attacked.
Elaine Wynn also asked in the letter the board that the rumored sale of the Massachusetts property be postponed until a new, reconstituted board was in place, and asked that the board respond by April 24.
Steve Wynn, who was the company’s largest shareholder, has since sold his entire financial interest, but regulatory investigations into his alleged misconduct continue in Nevada and Massachusetts, where the company is developing a $2.4 billion gaming resort outside Boston. It’s believed that authorities in both states are examining what the board may have known about the accusations of misconduct by its former chairman, of which at least two resulted in large private cash settlements with purported victims.
Maddox has said the company is open to selling the Boston project. MGM Resorts International has been named as a potential buyer (see USA Gaming).
The appointments of Myers, Atkins and Webb bring the number of directors to 11 and the board’s female representation to four, including Pat Mulroy, a former Nevada Gaming Commissioner and one-time head of the Southern Nevada Water Authority and Las Vegas Valley Water District.
“To be clear, this is the first step in our effort to refresh the board,” said Chairman D. Boone Wayson, a close associate and family friend of Steve Wynn’s. “We intend to add additional new directors in the coming months. The board is committed to enhancing value for our shareholders, delivering superior experiences for customers and creating a supportive and inclusive environment for all of the company’s employees.”
The three bring a wealth of corporate experience, not to mention diversity and independence, to a board rated last year as the worst for corporate governance by advisory firm Institutional Shareholder Service.
Myers, who served as press secretary in the first Clinton administration, was the first women to hold that post. She is the author of the best seller Why Women Should Rule the World.
Atkins, who serves on the boards of several major companies, is a founder of Baja Corporation, an independent venture capital firm focused on technology, renewable energy and health care. Previously, she was CEO of NCI, a creator and manufacturer of health foods whose products include the PowerBar brand, and is a former CEO of Clear Standards, which develops enterprise level software for energy management and sustainability. She is the author of Behind Boardroom Doors: Lessons of a Corporate Director.
Webb’s experience includes 20 years as a senior executive at the Walt Disney Co. and the Walt Disney Company Foundation, the company’s philanthropic arm. She has held executive positions with Ticketmaster and investment firm Tennenbaum Capital Partners and currently serves on the boards of ABM Industries and software developer 9 Spokes. She is co-chair of the non-profit Women Corporate Directors in Los Angeles.