The latest proxy advisor firm to publicly support a campaign against the Wynn Resorts board by its co-founder and largest shareholder Elaine Wynn has recommended the removal of as many “potentially tainted” directors as possible in order to boost the company’s standing in the eyes of Nevada and Massachusetts regulators.
Egan-Jones Proxy Services is the third proxy advisor firm in the past week to back Elaine Wynn, who recently launched a “Withhold the vote” campaign against current Wynn resorts director John J Hagenbuch ahead of next week’s AGM. Elaine Wynn has described Hagenbuch’s appointment to a special committee investigating sexual misconduct allegations against former Chairman and CEO Steve Wynn, with whom he is a close friend, as a deeply troubling conflict of interest.
In a report issued this week, Egan-Jones said, “We believe that in order to minimize the impact of both the Massachusetts and Nevada investigations into the issues with the firm’s former CEO, removal of as many directors (long-tenured directors) potentially tainted by this issue as possible is in the best interests of shareholders.
“Fixing the company’s brand and image must begin with a reformed leadership in the boardroom. In our view, a company’s financial success should be coupled with a solid board who will address the inadequacies of Wynn’s current corporate governance structure.”
Egan-Jones added that Elaine Wynn “presented a compelling case in voting against the re-election of John J Hagenbuch due to the following reasons: The problematic culture at Wynn stems from the misconduct of its former Chairman and CEO, Steve Wynn.
“We believe that the mere presence of Jay Hagenbuch in the board presents a strong conflict of interest, given that he has close ties with Mr Wynn.
“Mr Hagenbuch, as a member of the Special Committee that investigates the misconduct of Mr Wynn, makes the credibility of the whole probe in question. As such, the reputation of the company and the board is also compromised.”
Wynn Resorts has come out strongly in defense of Hagenbuch over the past week, declaring in an SEC filing that, “Jay has made important contributions that have benefited shareholders and shareholder value. The entire board believes that shareholders benefit from Jay’s knowledge of the company, our financial operations and our specialized regulatory framework.”
Steve Wynn stood down as the company’s Chairman and CEO in February amid allegations of sexual misconduct.
