The board of Wynn Resorts has rejected Elaine Wynn’s bid to have gaming industry icon Phil Satre appointed chairman or vice chairman amid signs that their recent battles over the company’s direction and governance are flaring up anew.
Ms. Wynn, the company’s largest shareholder with 8.8 percent of the stock, a holding worth around $1.5 billion, also has renewed her call for the annual elections of directors.
She also is calling for an “independent compensation consultant and truly independent legal counsel” to evaluate whether the departure this week of Executive Vice President and General Counsel Kim Sinatra—who as Steve Wynn’s reputed No. 2 may have played a key role in covering up her boss’s alleged sexual predations should be considered a termination “for cause”—a determination that likely would nix the fat package of severance pay and stock options Ms. Wynn believes the company has prepared for her.
The board did not respond specifically to her demands, saying only that it is “actively continuing its work to refresh the board, including reviewing candidates submitted by Elaine Wynn” and that it plans to add new members by the end of the summer, according to a New York Post report that was the first to confirm the Satre nomination.
But clearly the board looks increasingly divided. On one side are those who support Ms. Wynn; on the other, those siding with the current leadership under Chairman D. Boone Wayson, a longtime director and family friend of Steve Wynn’s who succeeded him as chairman after the sexual harassment allegations were made public in January and Wynn was forced to resign and sever all ties with the company he founded.
There are also outstanding investigations by gaming regulators in Nevada and Massachusetts into the sexual harassment accusations and the company’s response. The Massachusetts probe is the more worrisome. Much of the company’s future depends on the smooth opening next summer of a $2.4 billion megaresort outside Boston, now called Encore Boston Harbor after Steve Wynn’s name was removed, and it is believed in some circles that Sinatra resigned to appease the authorities there.
But as gaming analyst and Jefferies Group Managing Director David Katz told the Post, “The future direction of the company is far from certain.
“The problem is not only that the board is not united, but getting their investigations resolved requires a united board.”
“This company needs a complete revamp,” an industry insider told news website CDC Gaming Reports.
Some have suggested that if it can be proven that CEO Matt Maddox knew of Wynn’s sexual settlements, that he could be forced to resign if the company were to be granted a license in Massachusetts.
Then there are others, like Stifel Nicolaus Capital Markets analyst Steven Wieczynski, who say that concerns over Ms. Wynn’s latest salvo are “overblown”.
“We continue to see a compelling long-term case to own shares of Wynn,” he said.
What is certain is that it’s a very different Wynn 0Resorts since Wynn’s resignation, and his ex-wife has been instrumental in the remodeling by forcing a purge of several of his closest associates on the board. The board, in turn, has been active with its own damage control, appointing three women directors and refashioning its membership as one of the top 40 S&P 500 companies for female board representation.
Sinatra is expected to be replaced by longtime Las Vegas gaming attorney Ellen Whittemore. It will be another well-regarded move. Whittemore is highly respected and has more than 30 years’ experience in Nevada gaming law. She has represented MGM Resorts International as outside counsel and been involved in many of the company’s major acquisitions.
What also appears certain is that in demanding annual director elections Elaine Wynn is not taking no for an answer on her push for Satre or someone of equal stature to be placed at or near the corporate helm.
Satre, 69, currently is chairman of slot giant International Game Technology and the Nordstrom retail chain and is president of the National Center for Responsible Gaming. He is best-known for his savvy leadership as chairman of Harrah’s Entertainment in the ’80s and ‘90s when it was arguably the most admired and successful company in gaming.
Ms. Wynn believed so strongly in his value that she agreed to sign a declaration of support for the board for two years in what is known as a “standstill” if he was named chairman.
