Independent advisory firm Institutional Shareholder Services minced no words, as they recommended Wynn Resorts vote for John Hagenbuch and J. Edward Virtue as Class I directors, instead of Elaine Wynn.
“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,” Elaine Wynn responded.
The Wynn mess has been all over headlines the past few weeks, ever since Wynn Resorts asked for Elaine Wynn to step down from her chair on the company’s board. The he said-she said battle has reached an ugly head, and will only get uglier as the April 24 shareholders meeting approaches in which the company will vote for vacant chairs.
The 31-page assessment by ISS was initially expected to single out Elaine Wynn and recommend other candidates, but instead tore into the company itself, attacking Steve Wynn’s compensation structure and questioned his “excessive aircraft use”.
The report went on to say, “There appears to be no daylight between Elaine Wynn and the rest of the board on tolerating weak governance practices, poor pay practices, or an overall corporate governance profile that ranks among the worst, not the best, of U.S. companies.” ISS criticized Wynn’s pay structure, which according to them, set a very low bar for performance-based bonuses, all but assuring board members would be compensated heftily.
The solution from the report was to clean house, and that shareholders reject all candidates. “Given that this proxy contest is the one moment when every board is perhaps most keenly attentive to the voice of its shareholders, Wynn shareholders may wish, instead, to demand a more compelling alternative than the status quo,” the report went on to say.
For the past few weeks, Elaine Wynn has urged the company keep her around on the board for diversity, quickly noting she was the only female. The report from ISS Noted that Elaine Wynn “has not, apparently, done anything to drive additional diversity” during 13 years as director. In a statement, she agreed “the stockholders of Wynn Resorts deserve better than the choices presented to them by the company this proxy season,” but insisted voting for her was the solution.
Nell Minow, vice chair of ValueEdge Advisors points out the report “should be extremely embarrassing to the company because ISS Is saying the best thing the shareholders can do to protect their interests right now is send a message of a lack of confidence in the company. The lack of confidence from ISS is not being helped by the family drama which is assuredly playing a role in this fiasco.
Elaine Wynn has fought back at every accusation brought her way. In fact, she even wrote in her letter to shareholders why she would be a much better fit than Hagenbuch. Her argument revolves primarily around the disparity in experience within the industry. She points out Hagenbuch’s lack of gaming experience, of which none may exist out of the three years of service on Wynn Resorts’ Board.
She also criticized the relationship he and Steve Wynn have, calling him a “Sun Valley social friend.” She went on to say that Hagenbuch’s candidacy was initiated by Wynn himself, instead of the Nominating and Corporate Governance Committee. Shares of Wynn Resorts declined 23 percent last year.
