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Richard N. Velotta

Proxy firm urges withholding votes for Wynn candidates

7 April 2015

A leading independent proxy advisory firm has recommended that Wynn Resorts shareholders withhold their votes for two company-recommended candidates to serve on the company’s board of directors.

Institutional Shareholder Services, which monitors boardroom actions for institutional investors, also did not endorse a vote for company co-founder Elaine Wynn, who is embroiled in a high-profile boardroom squabble with the Wynn board.

Wynn Resorts officials issued a statement Sunday recommending that stockholders cast their votes for John Hagenbuch and J. Edward Virtue as Class I directors in the vote scheduled at the company’s annual meeting April 24.

Wynn immediately responded with her own recommendation — that they vote instead for her.

“I believe the stockholders of Wynn Resorts deserve better than the choices presented to them by the company this proxy season, and the only way to achieve meaningful value creation for my fellow stockholders is to vote the gold card for my re-election at the upcoming annual meeting,” Wynn said in a statement issued after the Institutional Shareholder Services recommendation.

“I firmly believe my judgment, considerable experience, important diversity and willingness to challenge the status quo makes me the best positioned candidate to guard and grow stockholders’ interest and identify additional diverse candidates with independent voices,” she said.

The Wynn board and Wynn have been embroiled in a high-profile proxy dispute since it was announced last month that the board wanted to oust her from its ranks.

“(Elaine Wynn) does not sit on the corporate governance committee, but she has not, apparently, done anything to drive additional diversity on the board, despite the protestations in her soliciting materials that the Wynn board needs diversity,” the Institutional Shareholder Servicessaid in its statement.

“She now believes she could qualify as independent under exchange rules, but also informs shareholders she has always – even as recently as February of this year – voted to classify herself as non-independent because ‘it seemed innocuous’…,” the statement said.

Institutional Shareholder Services’ report to investors said, “Unlike nearly every other proxy contest, the campaign being mounted by incumbent Wynn director — and two-time ex-wife of Wynn CEO Steve Wynn — Elaine Wynn makes no allegations of suboptimal operating performance or flawed corporate strategies, or a need to make changes in the executive suite, or even entrenched directors.

“It focuses, instead, on the singular charge that the independent directors erred gravely on Feb. 26 of this year in deciding not to renominate her to the board. In that decision, she alleges, they deprived all shareholders of the benefits not only of the 40 years of industry experience which made her more knowledgeable about the company’s “history, its operations its customers, or its award-winning staff’ than any director except the CEO, but also the last remaining vestige of gender diversity among its directors.”