Wynn Resorts has dismissed the findings of a damning report by leading shareholder advisory firm Glass Lewis into its corporate governance ahead of next week’s annual general meeting as the battle between the company and its largest shareholder Elaine Wynn heats up.
The report, released late last week, sided with Elaine Wynn in her “Withhold the vote” campaign against current Wynn Resorts director John “Jay” Hagenbuch, who is up for re-election. In an April filing, the former wife of Steve Wynn described Hagenbuch’s appointment to a special committee investigating sexual misconduct allegations against Steve Wynn as a deeply troubling conflict of interest. She also raised his service on the compensation committee since 2013 as a matter of concern due to questions over remunerations previously offered to former Chairman and CEO Steve Wynn.
In its report, Glass Lewis said it saw “greater value” for shareholders in supporting Elaine Wynn’s objection to Hagenbuch’s nomination, “which should be considered against his questionable role on the special committee reviewing accusations against Mr Wynn and his shared culpability for years of misaligned compensation practices that Glass Lewis continues to believe are problematic.”
Glass Lewis also accused Wynn Resorts of being “tone deaf” in its original handling of accusations of sexual misconduct leveled at Steve Wynn in February.
“Given the gravity of the allegations in question, the possibly adverse impact on portions of Wynn’s business and the decidedly nascent phase of the special committee’s process at that point in time, we consider the issuance of such a statement is fairly tone deaf in terms of timing and cultural context,” Glass Lewis said.
Wynn Resorts was quick to respond to the report, accusing Glass Lewis of failing to recognize recent initiatives to refresh the board and Hagenbuch’s contributions in regard to the appointment last month of three new female directors in Betsy Atkins, Dee Dee Myers and Wendy Webbas.
“We are disappointed that they have failed to acknowledge the important contributions that Jay Hagenbuch has made in helping to drive positive change at Wynn,” the company said in a filing. “As a fully independent member of the board who is committed to acting in the best interests of our shareholders, his knowledge of the company, our financial operations and industry environment contribute meaningfully to the Special Committee’s work.
“This board has acted swiftly and decisively by driving a refreshment process that has taken an important first step through the addition of three highly qualified female directors who strengthen the board’s skill sets, experience and diversity. The board’s actions have demonstrated that it is committed to moving swiftly and decisively to improve corporate governance and accountability, all while preserving shareholder value. Each of our nominees and the full board understand that we have a mandate to drive change and to move Wynn forward.
“The board has made great strides in restoring stability at Wynn, and it is not in shareholder interests to risk derailing the progress we are making.”
Wynn Resorts also pointed to concerns raised by Glass Lewis over Elaine Wynn’s “Withhold the vote” campaign, with the report stating, “We believe Ms Wynn’s campaign suffers from certain key flaws, not the least of which relate to asking investors to partially front-run key regulatory developments, pre-suppose management’s strategy around key assets and overlook her part in enabling the very corporate governance mechanisms that now limit the practicable avenues to effect meaningful change to the status quo.”
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