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Best of Howard Stutz

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Howard Stutz
 

Wynn Resorts seeks to oust Elaine Wynn from board of directors

2 March 2015

LAS VEGAS -- Wynn Resorts, Limited plans to remove longtime director Elaine Wynn from the casino operator’s board of directors, primarily due to a 2012 lawsuit she filed against her ex-husband, company Chairman and CEO Steve Wynn.

In a proxy filing with the U.S. Securities and Exchange Commission Friday, Wynn Resorts said it will reduce its Class I board members from three to two.

“The board decided not to re-nominate Elaine P. Wynn to serve as a director, based on the recommendation of the Nominating and Corporate Governance Committee,” the filing stated.

Wynn Resorts spokesman Michael Weaver said Sunday night the company would have “no further comment other than what is in the proxy statement.” However, Weaver said “Mr. Wynn supported the candidacy of Elaine.”

Elaine Wynn, meanwhile, is fighting back.

In a Feb. 13 letter to the company she 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 the Encore Theater at Wynn Las Vegas.

Elaine Wynn, who founded Wynn Resorts with her ex-husband in 2000 and has been a member of the board since 2002, could not be reached for comment.

Elaine Wynn, 71, is a widely known figure in Nevada through her philanthropic efforts. She is chairwoman of the Nevada State Board of Education. Forbes pegs her wealth at $2 billion, primarily due to 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.

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

Elaine Wynn filed the 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 Elaine Wynn’s lawsuit could negatively impact 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,” according to the SEC filing.

Wynn Resorts operates the Wynn Las Vegas and Encore Resort at Wynn Las Vegas 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.

According to the proxy statement, current Wynn board members John Hagenbuch, 63, a director since December 2012, and J. Edward Virtue, 54, a director since November 2012, were both nominated as Class I directors.

Class two directors include Steve Wynn, 73, who is the only board member considered a company insider; Ray Irani, 80, a director since October 2007; and Alvin Shoemaker, 76, a director since December 2002. Class III directors are former Gov. Bob Miller, 69, a director since 2002, and D. Boone Wayson, 62, a director since August 2003.

Miller served as chairman of the nominating corporate governance committee, along with Irani, Virture and Wayson.

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