Wynn Resorts Ltd – parent of Macau casino operator Wynn Macau Ltd – said in a filing to Nasdaq on Monday that Glass Lewis and Co, a leading independent proxy advisory firm, has recommended that Wynn Resorts stockholders vote for all of the firm’s director nominees in a proxy vote on April 24.
Wynn Resorts has proposed current directors John J. Hagenbuch and J. Edward Virtue for re-election to the board, and has not endorsed retaining Elaine Wynn, ex-wife of company founder and chairman Steve Wynn. Ms Wynn has declared that she is standing as an independent candidate.
Monday’s filing by Wynn Resorts quoted Glass Lewis and Co saying in relation to Ms Wynn: “We believe the board successfully argues that the dissident’s actions over recent periods – which notably encompass the submission of litigation discovery requests on Wynn’s independent directors – indicate that Ms Wynn’s interests as a significant shareholder and active litigant have increasingly taken priority over her fiduciary duties to all investors.”
The reference to Ms Wynn as an “active litigant” is understood to relate to her efforts to free herself from what Wynn Resorts says is an obligation to vote her 9.5 million shares in support of the 10 million held by Mr Wynn. Such an arrangement allows the ex-husband and ex-wife combined to retain the balance of voting power among the firm’s shareholders.
Ms Wynn in a filing on March 17 played down the idea her legal action could risk triggering lenders to seek a change of control at the company. She said that as the second- and third-largest shareholders respectively, “Mr Wynn and I have every incentive to arrive at an agreement and avoid triggering a covenant violation”.
On April 5, Institutional Shareholder Services Inc (ISS) – which, like Glass Lewis and Co, advises professional investors how to manage corporate governance risk related to their holdings – recommended that Wynn Resorts’ shareholders withhold support for all candidates currently seeking a seat on the company’s board, as a form of protest at the governance of the company.
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Praveen Choudhary, Gareth Leung and Thomas Allen
Analysts at Morgan Stanley banking group