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Best of Howard Stutz

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Howard Stutz
 

Elaine Wynn: Removal from company's board 'extraordinarily disappointing'

9 March 2015

LAS VEGAS -- Wynn Resorts, Limited director Elaine Wynn called a decision by the company to remove her from the board “extraordinarily disappointing,” and said she was considering her next move.

In a proxy filing with the Securities and Exchange Commission on Friday, Wynn Resorts said it was reducing its Class I board members from three to two and said the board decided not to renominate Wynn to serve as a director.

The board cited several reasons for the action, including a 2012 lawsuit she filed against her ex-husband, company Chairman and CEO Steve Wynn, to change a longstanding stockholders agreement.

“I, as the co-founder of Wynn Resorts, have devoted my life to making this company a success,” Elaine Wynn said in statement Monday e-mailed from Southern California attorney and political strategist Mark Fabiani.

“The decision excludes the last woman director from the board,” Wynn said. “I am reviewing all of my options.”

Wynn, 71, has been a member of Wynn Resorts’ board since 2002. She is a widely known figure in Nevada through her philanthropic efforts. Wynn is chairwoman of the Nevada State Board of Education.

Forbes pegs her wealth at $2 billion, primarily because of the 9.5 million shares in Wynn Resorts she owns.

In their 2010 divorce, she and Steve Wynn split their ownership in the casino company, each receiving more than 11 million shares. He remains the company’s largest shareholder, with more than 10 million shares.

Wynn Resorts spokesman Michael Weaver said that the company wouldn’t comment beyond what was detailed in the proxy statement.

“Steve Wynn supported the candidacy of Elaine Wynn, but the board, as a whole, accepted the recommendation of the nominating and corporate governance committee in electing to reduce the number of inside directors and not re-nominate her,” Weaver said.

Former Gov. Bob Miller, a Wynn Resorts board member since 2002, chaired the nominating corporate governance committee.

In a Feb. 13 letter to the company, Elaine Wynn said she “intends to nominate herself for election as a Class I director” and plans to solicit votes from company shareholders.

The Wynn Resorts annual shareholders meeting is scheduled for April 24 in Wynn Las Vegas’s Encore Theater.

In the proxy statement, the company detailed four reasons for removing Wynn: Concern about her “potential conflicts of interest”; her lawsuit against Steve Wynn over a long-standing stockholders agreement; the effect of the lawsuit; and her “lack of independence under Nasdaq listing standards.”

Elaine Wynn filed her lawsuit in 2012 when Wynn Resorts forcibly removed Japanese billionaire Kazuo Okada from the board and redeemed Okada’s 20 percent stake at a discount. According to the shareholders agreement, she was required to vote her shares with Steve Wynn.

She sued, seeking to change the stockholders agreement first signed in 2002 and amended in 2006 and 2010.

In the SEC filing, the company said Wynn’s lawsuit could harm several high-yield bonds covering a portion of the casino operator’s $7.3 billion in long-term debt.

“If Elaine Wynn prevails in her cross-claim, Stephen A. Wynn would not beneficially own or control Elaine Wynn’s shares, which could increase the likelihood that a change in control may occur under the Wynn Las Vegas debt documents,” the SEC filing says.

Wynn Resorts said the board plans to search over the coming year “for one or two new independent director candidates.”

Word of the Wynn dispute didn’t create a rumble on Wall Street. Analysts were reluctant to weigh in on the possible proxy fight. Meanwhile, shares of Wynn Resorts closed at $142.43 on Nasdaq, down 7 cents, or 0.05 percent.

Wynn Resorts operates Wynn Las Vegas and Encore on the Strip. The company has two casinos in Macau and is spending $4 billion to build the Wynn Palace on Macau’s Cotai Strip. The resort is expected to open in 2016.