Mar 25, 2015 Newsdesk Latest News, Top of the deck, World
Casino developer and operator Wynn Resorts Ltd on Tuesday made specific allegations about why in its view Elaine Wynn – a director of the company and former wife of chairman Steve Wynn – does not share the same goals as all the other stockholders. The new statement comes as Ms Wynn started seeking support for her re-election to the board.
The allegations include a claim she failed to declare a potential conflict of interest over a Las Vegas land deal, and that she sold company stock during a “blackout period” prior to a corporate earnings release.
Wynn Resorts’ board said late last month that it decided not to renominate Ms Wynn when her term expires on April 24, coinciding with the annual meeting. Ms Wynn has been on the board since the firm was founded in 2002 and is seeking re-election.
In a proxy filing with the U.S. Securities and Exchange Commission on Tuesday, Wynn Resorts accused Ms Wynn of potentially improper behaviour regarding a land deal in Las Vegas.
“Over the course of several years, Ms Wynn participated in board meetings in which Wynn Resorts’ plans to acquire property in Las Vegas were discussed at length. At no time did Ms Wynn recuse herself from the board discussions or inform the board that her nephew was involved in a competing bid. Ultimately, the land that Wynn Resorts wanted was purchased by a group that included Ms Wynn’s nephew,” the company said.
Ms Wynn’s nephew Andrew Pascal, a former president and chief operating officer of Wynn Las Vegas LLC, is a partner with James Packer’s Crown Resorts Ltd in a planned casino resort to be built on the land involved in that deal. The plot, the site of the former New Frontier casino, is on the western side of Las Vegas Boulevard, across the road from Wynn Las Vegas.
Wynn Resorts also alleged in its Tuesday filing that Ms Wynn sold US$10-million worth of company shares through her personal foundation during a blackout period ahead of the company’s earnings release, during which directors are forbidden by company policy to sell common stock.
“The independent directors believe Ms Wynn also placed her personal interests ahead of her role as a director when she took the position that her personal foundation is not subject to the company’s insider trading policy,” the firm said.
In a filing on Wednesday, Ms Wynn said she had no reason to recuse herself from board meetings discussing the land deal.
She added regarding the share sales allegation: “The company is fully aware of the long-standing process in place allowing me to transfer shares to my philanthropic foundation and allowing me no input into whether/when the shares are sold.”
In 2012, Ms Wynn filed a lawsuit seeking to free her of the obligation to vote her company stock with Mr Wynn. The company had said in a previous filing that if she won the legal bid it could trigger a “change of control” provision under the terms of the company’s outstanding debt securities, thereby potentially requiring the company to offer to repurchase a significant amount of the securities.
In Tuesday’s filing, Wynn Resorts said Ms Wynn used the suit against Mr Wynn “to serve litigation discovery requests on each of the independent directors, demanding they produce documents related to the decision not to re-nominate her as a director”.
The company added that Ms Wynn’s efforts to separate her actions in her litigation from her role as a director “have been ineffective and have impaired her ability to participate effectively as a director”.
On Tuesday, Ms Wynn stepped up efforts to keep her seat on the board, launching a campaign website and filed her own presentation on why she makes the best re-election candidate. She touted her decades of experience, passion and independence, and her role as the company’s sole female director.
Ms Wynn said she brings a “strong, independent and diverse voice” to the board and that her “interests are aligned with stockholders”. She added that her role “adds much needed representation for the viewpoints of women, who comprise an important and influential segment of Wynn Resorts’ consumer base”.
The casino operator, for its part, said it recognised that gender diversity “is important”. The company said its board voted to reduce the number of members, but added the reduction “is expected to be temporary”.
“The corporate governance committee intends to prioritise women and diverse candidates in its search, and will name one or more diverse directors to the board by the end of 2015,” it added.
Wynn Resorts also urged stockholders to disregard Ms Wynn’s proxy statement and vote for its nominees. The company’s nominees are John J. Hagenbuch, who has served as a director since December 2012, and J. Edward Virtue, who has been a director since November 2012.
(Updated on Mar 26, 9.55am)
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